Exhibit 4.1
EXECUTION
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FINANCIAL ASSET SECURITIES CORP.,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
▇▇▇▇▇▇ LOAN SERVICING LP,
Servicer
and
JPMORGAN CHASE BANK,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2002
2002-CB6 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
==============================================================================
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms................................................................................12
Section 1.02 Accounting...................................................................................58
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.................................................................58
Section 2.02 Acceptance by Trustee........................................................................60
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller...................................61
Section 2.04 Representations and Warranties of the Seller with Respect to the Mortgage Loans..............64
Section 2.05 Representations, Warranties and Covenants of the Servicer....................................65
Section 2.06 Representations and Warranties of the Depositor..............................................67
Section 2.07 Issuance of Certificates.....................................................................69
Section 2.08 Representations and Warranties of the Seller.................................................69
Section 2.09 Covenants of the Seller......................................................................71
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer..................................................................71
Section 3.02 Collection of Mortgage Loan Payments.........................................................73
Section 3.03 Realization Upon Defaulted Mortgage Loans....................................................74
Section 3.04 Collection Account and Distribution Account..................................................75
Section 3.05 Permitted Withdrawals From the Collection Account............................................77
Section 3.06 Establishment of Escrow Account; Deposits in Escrow Account..................................78
Section 3.07 Permitted Withdrawals From Escrow Account....................................................78
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder........................79
Section 3.09 Transfer of Accounts.........................................................................80
Section 3.10 Maintenance of Hazard Insurance..............................................................80
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy..........................................81
Section 3.12 Fidelity Bond, Errors and Omissions Insurance................................................81
Section 3.13 Title, Management and Disposition of REO Property............................................82
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements..................................84
Section 3.15 Notification of Adjustments..................................................................85
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Section 3.16 Optional Purchases of Mortgage Loans by Servicer.............................................85
Section 3.17 Trustee to Cooperate; Release of Files.......................................................86
Section 3.18 Servicing Compensation.......................................................................87
Section 3.19 Annual Statement as to Compliance............................................................87
Section 3.20 Annual Independent Certified Public Accountants' Reports.....................................87
Section 3.21 Access to Certain Documentation and Information Regarding the Mortgage Loans.................88
Section 3.22 Reserved.....................................................................................88
Section 3.23 Obligations of the Servicer in Respect of Compensating Interest..............................88
Section 3.24 Obligations of the Servicer in Respect of Mortgage Interest Rates and Monthly
Payments.....................................................................................89
Section 3.25 Investment of Funds in the Collection Account and the Distribution Account...................89
Section 3.26 Liability of Servicer; Indemnification.......................................................90
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties...............................91
Section 3.28 Protection of Assets.........................................................................91
Section 3.29 Advance Facility.............................................................................92
Section 3.30 SEC Reporting................................................................................94
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.......................................................................96
Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts.............................. 98
Section 4.03 Allocation of Losses........................................................................103
Section 4.04 Method of Distribution......................................................................103
Section 4.05 Distributions on Book-Entry Certificates....................................................103
Section 4.06 Statements..................................................................................103
Section 4.07 Remittance Reports; Advances................................................................107
Section 4.08 Basis Risk Reserve Fund.....................................................................108
Section 4.09 The Interest Rate Cap Agreements............................................................110
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates............................................................................112
Section 5.02 Registration of Transfer and Exchange of Certificates.......................................113
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........................................118
Section 5.04 Persons Deemed Owners.......................................................................118
Section 5.05 Appointment of Paying Agent.................................................................118
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
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Section 6.01 Liability of the Seller, the Servicer and the Depositor.....................................119
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Seller, the
Servicer or the Depositor...................................................................119
Section 6.03 Limitation on Liability of the Servicer and Others..........................................119
Section 6.04 Servicer Not to Resign......................................................................120
Section 6.05 Delegation of Duties........................................................................121
ARTICLE VII
SERVICER EVENTS OF TERMINATION
Section 7.01 Servicer Events of Termination..............................................................121
Section 7.02 Trustee to Act; Appointment of Successor....................................................123
Section 7.03 Waiver of Defaults..........................................................................124
Section 7.04 Notification to Certificateholders..........................................................124
Section 7.05 Survivability of Servicer Liabilities.......................................................125
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee...........................................................................125
Section 8.02 Certain Matters Affecting the Trustee.......................................................126
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......................................128
Section 8.04 Trustee May Own Certificates................................................................129
Section 8.05 Seller to Pay Trustee Fees and Expenses.....................................................129
Section 8.06 Eligibility Requirements for Trustee........................................................130
Section 8.07 Resignation or Removal of Trustee...........................................................130
Section 8.08 Successor Trustee...........................................................................131
Section 8.09 Merger or Consolidation of Trustee..........................................................131
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............................................131
Section 8.11 Limitation of Liability.....................................................................133
Section 8.12 Trustee May Enforce Claims Without Possession of Certificates...............................133
Section 8.13 Suits for Enforcement.......................................................................133
Section 8.14 Waiver of Bond Requirement..................................................................134
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement...................................134
Section 8.16 Compliance with National Housing Act of 1934................................................134
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration........................................................................134
Section 9.02 Prohibited Transactions and Activities......................................................138
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of REMIC Status......................138
Section 9.04 REO Property................................................................................138
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ARTICLE X
TERMINATION
Section 10.01 Termination.................................................................................139
Section 10.02 Additional Termination Requirements.........................................................141
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment...................................................................................142
Section 11.02 Recordation of Agreement; Counterparts......................................................143
Section 11.03 Limitation on Rights of Certificateholders..................................................143
Section 11.04 Governing Law; Jurisdiction.................................................................144
Section 11.05 Notices.....................................................................................144
Section 11.06 Severability of Provisions..................................................................145
Section 11.07 Article and Section References..............................................................145
Section 11.08 Notice to the Rating Agencies...............................................................145
Section 11.09 Further Assurances..........................................................................146
Section 11.10 Benefits of Agreement.......................................................................146
Section 11.11 Acts of Certificateholders..................................................................146
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EXHIBITS
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Exhibit A-1 Form of Class 1-A1 Certificates
Exhibit A-2 Form of Class 2-A1 Certificates
Exhibit A-3 Form of Class 3-F1 Certificates
Exhibit A-4 Form of Class A-IO Certificates
Exhibit B-1 Form of Class B-1 Certificates
Exhibit B-2 Form of Class B-2 Certificates
Exhibit B-3 Form of Class B-3 Certificates
Exhibit C-1 Form of Class R Certificates
Exhibit C-2 Form of Class M-1 Certificates
Exhibit C-3 Form of Class M-2V Certificates
Exhibit C-4 Form of Class M-2F Certificates
Exhibit C-5 Form of Class N Certificates
Exhibit C-6 Form of Class X Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of 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 Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M [Reserved]
Exhibit N [Reserved]
Exhibit O [Reserved]
Exhibit P Monthly Information Provided by Servicer
Exhibit Q Form of Officer's Certificate with Respect to Prepayments
Exhibit R Form of Class 1-A1 Confirmation
Exhibit S Form of Class 2-A1 Confirmation
Exhibit T Form of Class M-1 Confirmation
Exhibit U Form of Class M-2V Confirmation
Exhibit V Form of Class B-1 Confirmation
Exhibit W Form of Certification to be Provided to the Servicer by the Trustee
Schedule I Prepayment Penalty Schedule
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This Pooling and Servicing Agreement is dated as of December 1, 2002
(the "Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor (the
"Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as seller
(the "Seller"), ▇▇▇▇▇▇ LOAN SERVICING LP, as servicer (the "Servicer"), and
JPMORGAN CHASE BANK, 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
fourteen Classes of Certificates, designated as (i) the Class 1-A1, Class
2-A1, Class 3-F1 and Class A-IO Certificates, (ii) the Class M-1, Class M-2V
and Class M-2F Certificates, (iii) the Class B-1, Class B-2 and Class B-3
Certificates, (iv) the Class N Certificates, (v) the Class X Certificates and
(vi) the Class R-1 and Class R-2 Certificates.
The Depositor hereby assigns to the Trustee, acting on behalf of the
Certificateholders its interests and rights in the Mortgage Loans (exclusive
of any Arrearage in respect of Delinquent Mortgage Loans). As provided herein,
the Trustee will make multiple elections to treat segregated pools of assets
subject to this Agreement for federal income tax purposes as the following six
separate real estate mortgage investment conduits (each, a "REMIC"): the
Subsidiary REMIC, the Intermediate REMIC, the Master REMIC, the Class B-2
REMIC, the Class B-3 REMIC, and the Class X-N REMIC. The Subsidiary REMIC will
consist of (a) all of the assets constituting the Group 1 Mortgage Loans, (b)
all of the assets constituting the Group 2 Mortgage Loans, and (c) all of the
assets constituting the Group 3 Mortgage Loans. The Subsidiary REMIC will
issue (1) uncertificated REMIC regular interests designated with an "1A" or
"1B" and payable from the monies received from the Group 1 Mortgage Loans (the
"Subsidiary 1 Regular Interests"), (2) uncertificated REMIC regular interests
designated with an "2A" or "2B" and payable from the monies received from the
Group 2 Mortgage Loans (the "Subsidiary 2 Regular Interests"), and (3)
uncertificated REMIC regular interests designated with an "3A" or "3B" and
payable from the monies received from the Group 3 Mortgage Loans (the
"Subsidiary 3 Regular Interests" and, together with the Subsidiary 1 Regular
Interests and the Subsidiary 2 Regular Interests, the "Subsidiary REMIC
Regular Interests"). The Subsidiary REMIC Regular Interests will be
uncertificated and will represent the "regular interests" in the Subsidiary
REMIC and the SR Interest will represent the single "residual interest" in the
Subsidiary REMIC.
The Trustee will hold the Subsidiary REMIC Regular Interests for the
benefit of the Intermediate REMIC. The Intermediate REMIC will consist of the
Subsidiary REMIC Regular Interests and will be evidenced by (i) the
Intermediate REMIC Regular Interests, which will be uncertificated and will
represent the "regular interests" in the Intermediate REMIC and (ii) the IR
Interest, which will represent the single "residual interest" in the
Intermediate REMIC.
The Trustee will hold the Intermediate REMIC Regular Interests for
the benefit of the Master REMIC. The Master REMIC will consist of the
Intermediate REMIC Regular Interests and will be evidenced by (i) the Regular
Certificates (other than the Class B-2, Class B-3, Class X and Class N
Certificates) and the Class B-2 Interest, Class B-3 Interest, and Class
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Master XN Interest, which will represent the "regular interests" in the Master
REMIC and (ii) the Class MR Interest, which will represent the single
"residual interest" in the Master REMIC.
The Trustee will hold the Class B-2 Interest for the benefit of the
Class B-2 REMIC. The Class B-2 REMIC will consist of the Class B-2 Interest
and will be evidenced by (i) the Class B-2 Certificates, which will represent
the "regular interests" in the Class B-2 REMIC and (ii) the Class B2R
Interest, which will represent the single "residual interest" in the Class B-2
REMIC.
The Trustee will hold the Class B-3 Interest for the benefit of the
Class B-3 REMIC. The Class B-3 REMIC will consist of the Class B-3 Interest
and will be evidenced by (i) the Class B-3 Certificates, which will represent
the "regular interests" in the Class B-3 REMIC and (ii) the Class B3R
Interest, which will represent the single "residual interest" in the Class B-3
REMIC.
The Trustee will hold the Class Master XN Interest for the benefit
of the Class X-N REMIC. The Class X-N REMIC will consist of the Class Master
XN Interest and will be evidenced by (i) the Class X-N Interest, which will
represent the "regular interests" in the Class X-N REMIC and (ii) the Class
XNR Interest, which will represent the single "residual interest" in the Class
X-N REMIC. As discussed in section 9.01 of the Agreement, the Class X and
Class N Certificates will represent the beneficial interest in the Class X-N
Interest.
The Class R-1 Certificates will represent the Class SR, Class IR and
Class MR Interests, and the Class R-2 Certificates will represent the Class
B2R, Class B3R and Class XNR Interests. The "latest possible maturity date"
for federal income tax purposes of all REMICs, and regular and residual
interests created hereunder will be the Latest Possible Maturity Date.
The Subsidiary REMIC
--------------------
The following table sets forth Class Designation, the Initial
Principal Balance, the Pass-Through Rate and the Rate Change Date for each
Subsidiary Regular Interest:
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Subsidiary Balance Pass Through Rate Rate Change Date
1A-1 $10,231,000.00 (1) Feb-03
1A-2 $3,069,000.00 (1) Apr-03
1A-3 $5,115,000.00 (1) May-03
1A-4 $3,069,000.00 (1) Jun-03
1A-5 $4,092,000.00 (1) Jul-03
1A-6 $2,046,000.00 (1) Aug-03
1A-7 $2,046,000.00 (1) Sep-03
1A-8 $3,069,000.00 (1) Oct-03
1A-9 $3,069,000.00 (1) Nov-03
1A-10 $2,046,000.00 (1) Dec-03
1A-11 $32,737,000.00 (1)(3) Jan-04
1B (2) (1) N/A
2A-1 $6,472,000.00 (4) Feb-03
2A-2 $1,942,000.00 (4) Apr-03
2A-3 $3,236,000.00 (4) May-03
2A-4 $1,942,000.00 (4) Jun-03
2A-5 $2,588,000.00 (4) Jul-03
2A-6 $1,295,000.00 (4) Aug-03
2A-7 $1,294,000.00 (4) Sep-03
2A-8 $1,942,000.00 (4) Oct-03
2A-9 $1,942,000.00 (4) Nov-03
2A-10 $1,294,000.00 (4) Dec-03
2A-11 $20,711,000.00 (4)(3) Jan-04
2B (5) (4) N/A
3A-1 $13,978,000.00 (6) Feb-03
3A-2 $4,659,000.00 (6) Apr-03
3A-3 $5,824,000.00 (6) May-03
3A-4 $4,659,000.00 (6) Jun-03
3A-5 $5,824,000.00 (6) Jul-03
3A-6 $3,494,000.00 (6) Aug-03
3A-7 $4,659,000.00 (6) Sep-03
3A-8 $3,495,000.00 (6) Oct-03
3A-9 $3,494,000.00 (6) Nov-03
3A-10 $3,495,000.00 (6) Dec-03
3A-11 $47,756,000.00 (6)(3) Jan-04
3B (7) (6) N/A
SR N/A N/A N/A
(1) The Group 1 Net WAC Rate.
(2) The Class 1B regular interest will have a principal balance equal to the principal balance of all Group
1 Mortgage Loans minus the principal balance of the other Subsidiary 1 Regular Interests.
(3) This Regular Interest will also be entitled to all Prepayment Charges related to its respective group.
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(4) The Group 2 Net WAC Rate.
(5) The Class 2B regular interest will have a principal balance equal to the principal balance of all Loan
Group 2 Mortgage Loans minus the principal balance of the other Subsidiary 2 Regular Interests.
(6) The Group 3 Net WAC Rate.
(7) The Class 3B regular interest will have a principal balance equal to the principal balance of all Loan
Group 3 Mortgage Loans minus the principal balance of the other Subsidiary 3 Regular Interests.
All payments of principal and realized losses (including any
interest shortfalls) generated by the Group 1 Mortgage Loans shall be
allocated first to the Class 1B Regular Interests (until reduced to zero).
Subsequent realized losses (including any interest shortfalls) and payments of
principal will be allocated to the outstanding Subsidiary 1 REMIC Regular
Interest with the lowest denomination (until reduced to zero). All payments of
principal and realized losses (including any interest shortfalls) generated by
the Loan Group 2 Mortgage Loans shall be allocated first to the Class 2B
Regular Interests (until reduced to zero). Subsequent realized losses
(including any interest shortfalls) and payments of principal will be
allocated to the outstanding Subsidiary 2 REMIC Regular Interest with the
lowest denomination (until reduced to zero). All payments of principal and
realized losses (including any interest shortfalls) generated by the Loan
Group 3 Mortgage Loans shall be allocated first to the Class 3B Regular
Interests (until reduced to zero). Subsequent realized losses (including any
interest shortfalls) and payments of principal will be allocated to the
outstanding Subsidiary 3 REMIC Regular Interest with the lowest denomination
(until reduced to zero).
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The Intermediate REMIC
----------------------
The following table sets forth Class Designation, the Initial Principal
Balance, the Pass-Through Rate, and the Corresponding Master REMIC Class for
each Intermediate REMIC Regular Interest:
==================================================================================================================
Pass-Through Corresponding
Class Designation Initial Principal Balance Rate Master REMIC Class Loan Group
------------------------------------------------------------------------------------------------------------------
Class I-AI(1) 1/4 Corresponding Master REMIC (3) Class 1-A1 1
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I-A2(1) 1/4 Corresponding Master REMIC (3) Class 2-A1 2
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I-A3(1) 1/4 Corresponding Master REMIC (3) Class 3-F1 3
Class Balance
------------------------------------------------------------------------------------------------------------------
Class IA-IO (4) (4) Class A-IO N/A
------------------------------------------------------------------------------------------------------------------
Class I M-1(1) 1/4 Corresponding Master REMIC (3) Class M-1 N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I M-2F(1) 1/4 Corresponding Master REMIC (3) Class M-2F N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I M-2V(1) 1/4 Corresponding Master REMIC (3) Class M-2V N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I B-1(1) 1/4 Corresponding Master REMIC (3) Class B-1 N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I B-2(1) 1/4 Corresponding Master REMIC (3) Class B-2 N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Class I B-3(1) 1/4 Corresponding Master REMIC (3) Class B-3 N/A
Class Balance
------------------------------------------------------------------------------------------------------------------
Accrual Directed Class 1/4 Pool Balance plus 1/4 of the (3)(5) N/A N/A
Overcollateralization Amount
------------------------------------------------------------------------------------------------------------------
Class IR N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------
Class I-Senior-1(2) (6) (7) Class 1-A1 1
------------------------------------------------------------------------------------------------------------------
Class I-Senior-2(2) (8) (9) Class 2-A1 2
------------------------------------------------------------------------------------------------------------------
Class I-Senior-3(2) (10) (11) Class 3-F1 3
------------------------------------------------------------------------------------------------------------------
Class I-Sub-1a(2) (12) (13) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-1b(2) (12) (14) N/A N/a
------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------
Class I-Sub-1c(2) (12) (13) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-1d(2) (12) (14) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-2a(2) (15) (16) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-2b(2) (15) (17) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-2c(2) (15) (16) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-2d(2) (15) (17) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-3a(2) (18) (19) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-3b(2) (18) (20) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-3c(2) (18) (19) N/A N/a
------------------------------------------------------------------------------------------------------------------
Class I-Sub-3d(2) (18) (20) N/A N/a
==================================================================================================================
1) The Accretion Directed Classes.
2) The Sub Wac Tracking Classes.
3) The Adjusted Net WAC Rate.
4) The Class IA-IO regular interest will represent 33 regular interests, which will be divided into three groups
- Group 1, Group 2 and Group 3. The Group 1 interests will be numbered 1A-1 through 1A-11. The Group 2
interests will be numbered 2A-1 through 2A-11. The Group 3 interests will be numbered 3A-1 through 3A-11.
Each Class IA-IO regular interest will not be entitled to any principal but will have a notional balance
equal to the principal balance of the Subsidiary REMIC Regular Interest class with the same group
denomination and numerical denomination. Each Class IA-IO Regular Interest will have a Pass-Through Rate
equal to (a) from the Cut-off Date to its respective Rate Change Date, 3.25%, and (b) thereafter, 0%.
5) The Accrual Directed Class regular interest will be entitled to all Prepayment Charges.
6) 1/2 the principal balance of the Group 1 Mortgage Loans less the principal balance of the Class 1-Sub-1
Interests.
7) The Group 1 Adjusted Net WAC Rate.
8) 1/2 the principal balance of the Group 2 Mortgage Loans less the principal balance of the Class 1-Sub-2
Interests.
9) The Group 2 Adjusted Net WAC Rate.
10) 1/2 the principal balance of the Group 3 Mortgage Loans less the principal balance of the Class 1-Sub-3
Interests.
11) The Group 3 Adjusted Net WAC Rate.
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12) An amount equal to 1/40 of the Corresponding Master REMIC principal balance of the Class M-1, Class M-2,
Class B-1 and Class B-2 Certificates (the "Subordinated Certificates") multiplied by Group 1 Share.
13) The rate equal to 1.25 times the Group 1 Adjusted Net WAC Rate.
14) The rate equal to 0.75 times the Group 1 Adjusted Net WAC Rate.
15) An amount equal to 1/40 of the Corresponding Master REMIC principal balance of the Subordinated Certificates
multiplied by Group 2 Share.
16) The rate equal to 1.25 times the Group 2 Adjusted Net WAC Rate.
17) The rate equal to 0.75 times the Group 2 Adjusted Net WAC Rate.
18) An amount equal to 1/40 of the Corresponding Master REMIC principal balance of the Subordinated Certificates
multiplied by Group 3 Share.
19) The rate equal to 1.25 times the Group 3 Adjusted Net WAC Rate.
20) The rate equal to 0.75 times the Group 3 Adjusted Net WAC Rate.
The Expanding Strip Tracking Classes:
-------------------------------------
The Accrual Directed Class and the Accretion Directed Classes, are
hereby designated the Expanding Strip Tracking Classes.
On each Distribution Date, 25% of the increase in the
Overcollateralization Amount will be payable as a reduction of the principal
balances of the Accretion Directed Classes to each such class in an amount
equal to 1/4 of the interest paid in reduction of the principal balance of the
Corresponding Class of Master REMIC Interest and will be accrued and added to
the principal balance of the Accrual Directed Class. On each Distribution
Date, the increase in the principal balance of the Accrual Directed Class may
not exceed interest accruals for such Distribution Date for the Accrual
Directed Class. In the event that: (i) 25% of the increase in the
Overcollateralization Amount exceeds (ii) interest accruals on the Accrual
Directed Class for such Distribution Date, the excess for such Distribution
Date (accumulated with all such excesses for all prior Distribution Dates)
will be added to any increase in the Overcollateralization Amount for purposes
of determining the amount of interest accrual on the Accrual Directed Class
payable as principal on the Accrual Directed Class on the next Distribution
Date pursuant to the first sentence of this paragraph.
All payments of principal generated by the Mortgage Loans shall be
allocated 25% to the Accrual Directed Class, and 25% to the Accretion Directed
Classes to each such Accretion Directed Class in an amount equal to 1/4 of the
interest paid in reduction of the principal balance of the Corresponding Class
of Master REMIC Interest (until paid in full). Notwithstanding the above,
principal payments allocated to the Accretion Directed Classes that result in
the reduction in the Overcollateralization Amount shall be allocated to the
Accrual
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Directed Class (until paid in full). Realized losses shall be applied so that
after all distributions have been made on each Distribution Date (i) the
principal balances of each of the Accretion Directed Classes is equal to 25%
of the principal balance of their Corresponding Class and (ii) the Accrual
Directed Class is equal to 25% of the aggregate principal balance of the
Mortgage Loans plus 25% of the Overcollateralization Amount. Interest
shortfalls will be allocated pro rata based on each regular interests
principal balance.
The Sub Wac Tracking Classes:
-----------------------------
Group 1 Mortgage Loans:
On each Distribution Date, 50% of the payments received on the Group
1 Mortgage Loans will be allocated, first, to the Class I-Sub-1 Interests, in
an amount necessary to make each Class I-Sub-1 Interest's balance equal to the
Group 1 Subordinated Amount. Notwithstanding the previous sentence, if due to
overcollateralization (or anything else), the sum of a group's I-Sub Interests
is less than the product of (A) 4, (B) the Intermediate REMIC Ratio, (C) the
Principal Balance of the Subordinated Certificates, and (D) the respective
Group Share, the Intermediate REMIC Ratio will be reduced to a the ratio equal
to (i) (a) the sum of the Groups I-Sub Interests, divided by the (b) the
product of (i) the respective Group Share (ii) 4, (iii) the sum of the
Subordinated Certificates.
Payments to the Class I-Sub-1 Interests, will generally be made
pro-rata to the each Class I-Sub-1 Interest. However, where either the Class
I-Sub-2 Interests or Class I-Sub-3 Interests have been reduced to zero, and as
a result of this event (or any other event), the Sub WAC Alternative Rate is
greater than or less than the Sub WAC Rate, payments will be allocated in a
manner necessary to adjust the Sub WAC Rate to the Sub WAC Alternative Rate.
After paying the above, any excess amounts will be paid to the Class
I-Senior-1 Interest (until reduced to zero). Realized losses shall be applied
on each Distribution Date, (i) first to the Class I-Sub-1 Interests (pro-rata,
unless adjusted under the preceding paragraph) until such Interests have a
balance equal to the Group 1 Subordinated Amount, and (ii) second, to the
Class I-Senior-1 Interest (until reduced to zero).
Group 2 Mortgage Loans:
On each Distribution Date, 50% of the payments received on the Group
2 Mortgage Loans will be allocated, first, to the Class I-Sub-2 Interests, in
an amount necessary to make each Class I-Sub-2 Interest's balance equal to the
Group 2 Subordinated Amount. Notwithstanding the previous sentence, if due to
overcollateralization (or anything else), the sum of a group's I-Sub Interests
is less than the product of (A) 4, (B) the Intermediate REMIC Ratio, (C) the
Principal Balance of the Subordinated Certificates, and (D) the respective
Group Share, the Intermediate REMIC Ratio will be reduced to a the ratio equal
to (i) (a) the sum of the Groups I-Sub Interests, divided by the (b) the
product of (i) the respective Group Share (ii) 4, (iii) the sum of the
Subordinated Certificates.
Payments to the Class I-Sub-2 Interests, will generally be made
pro-rata to the each Class I-Sub-2 Interest. However, where either the Class
I-Sub-3 Interests or Class I-Sub-1 Interests have been reduced to zero, and as
a result of this event (or any other event), the Sub
-8-
WAC Alternative Rate is greater than or less than the Sub WAC Rate, payments
will be allocated in a manner necessary to adjust the Sub WAC Rate to the Sub
WAC Alternative Rate.
After paying the above, any excess amounts will be paid to the Class
I-Senior-2 Interest (until reduced to zero). Realized losses shall be applied
on each Distribution Date, (i) first to the Class I-Sub-2 Interests (pro-rata,
unless adjusted under the preceding paragraph) until such Interests have a
balance equal to the Group 2 Subordinated Amount, and (ii) second, to the
Class I-Senior-2 Interest (until reduced to zero).
Group 3 Mortgage Loans:
On each Distribution Date, 50% of the payments received on the Group
3 Mortgage Loans will be allocated, first, to the Class I-Sub-3 Interests, in
an amount necessary to make each Class I-Sub-3 Interest's balance equal to the
Group 3 Subordinated Amount. Notwithstanding the previous sentence, if due to
overcollateralization (or anything else), the sum of a group's I-Sub Interests
is less than the product of (A) 4, (B) the Intermediate REMIC Ratio, (C) the
Principal Balance of the Subordinated Certificates, and (D) the respective
Group Share, the Intermediate REMIC Ratio will be reduced to a the ratio equal
to (i) (a) the sum of the Groups I-Sub Interests, divided by the (b) the
product of (i) the respective Group Share (ii) 4, (iii) the sum of the
Subordinated Certificates.
Payments to the Class I-Sub-3 Interests, will generally be made
pro-rata to the each Class I-Sub-3 Interest. However, where either the Class
I-Sub-1 Interests or Class I-Sub-2 Interests have been reduced to zero, and as
a result of this event (or any other event), the Sub WAC Alternative Rate is
greater than or less than the Sub WAC Rate, payments will be allocated in a
manner necessary to adjust the Sub WAC Rate to the Sub WAC Alternative Rate.
After paying the above, any excess amounts will be paid to the Class
I-Senior-3 Interest (until reduced to zero). Realized losses shall be applied
on each Distribution Date, (i) first to the Class I-Sub-3 Interests (pro-rata,
unless adjusted under the preceding paragraph) until such Interests have a
balance equal to the Group 3 Subordinated Amount, and (ii) second, to the
Class I-Senior-3 Interest (until reduced to zero).
The Master REMIC
----------------
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
===========================================================================================================
Certificate Pass-Through Minimum Integral Multiples in
Principal Balance Rate Denomination Excess of Minimum
-----------------------------------------------------------------------------------------------------------
Class 1-A1 $78,464,000 Floating(1) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class 2-A1 $53,198,000 Floating(2) $25,000 $1,000
===========================================================================================================
-9-
-----------------------------------------------------------------------------------------------------------
Class 3-F1 $86,190,000 4.03%(3) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class A-IO (4) 3.25%(4) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class M-1 $21,998,000 Floating(5) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class M-2V $5,869,000 Floating(6) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class M-2F $14,000,000 5.82%(7) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class B-1 $12,773,000 Floating(8) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class B-2(9) $3,548,000 Floating(10) N/A N/A
-----------------------------------------------------------------------------------------------------------
Class B-3(9) $3,548,000 Floating(11) N/A N/A
-----------------------------------------------------------------------------------------------------------
Class MR $100.00 N/A $100.00 N/A
-----------------------------------------------------------------------------------------------------------
Class Master XN(12) (12) (12) N/A N/A
===========================================================================================================
--------------
1) The lesser of (a) the Class 1-A1 Pass-Through Rate and (b) the Group 1 Adjusted Net WAC Rate.
2) The lesser of (a) the Class 2-A1 Pass-Through Rate and (b) the Group 2 Adjusted Net WAC Rate.
3) Subject to a cap equal to the Group 3 Adjusted Net WAC Rate. If the optional call is not exercised on
the Optional Termination Date, the Pass-Through Rate for this Class will increase by 0.50%.
4) The Class A-IO Certificate will not have a principal balance but will have a notional balance equal to
the sum of the notional balances of Class I1A-IO, Class I2A-IO, and the Class I3A-IO Interest and will
be entitled to 100% of the amounts distributable on Class I1A-IO, Class I2A-IO and Class I3A-IO
Interest. Each component will be subject to a cap equal to its related group's Adjusted Mortgage WAC
Rate.
5) The lesser of (a) the Class M-1 Pass-Through Rate and (b) the Sub WAC Rate.
6) The lesser of (a) the Class M-2V Pass-Through Rate and (b) the Sub WAC Rate.
7) Subject to a cap equal to the Sub WAC Rate.
8) The lesser of (a) the Class B-1 Pass-Through Rate and (b) the Sub WAC Rate.
9) Such regular interest will not be certificated, but instead, such interest will be held by the trustee
in the REMIC and in the manner described below.
10) The lesser of (a) the Class B-2 Pass-Through Rate and (b) the Sub WAC Rate.
11) The lesser of (a) the Class B-3 Pass-Through Rate and (b) the Sub WAC Rate.
12) As to any Distribution Date, the Class Master XN Interest will have a Notional Balance equal to the
aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Collection
Period, and a Pass-Through Rate equal to the excess of: (i) the Adjusted Net WAC Rate over (ii) the
product of: (A) two and (B) the weighted average Pass-Through Rate of the Expanding Strip Tracking
Classes, where the Accrual Directed Class is subject to a cap equal to zero and each Intermediate
REMIC Accretion Directed Class is subject to a cap equal to the Pass-Through Rate on its Corresponding
Class. The Class Master XN Interest will also be entitled to all Prepayment Charges.
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The Class B-2 REMIC
-------------------
The Class B-2 Interest will be the sole asset of the Class B-2
REMIC. The following table sets forth characteristics of the Class B-2
Certificates and the Class B2R Interest, together with the minimum
denominations and integral multiples in excess thereof:
===========================================================================================================
Certificate Pass-Through Minimum Integral Multiples in Excess
Principal Balance Rate Denomination of Minimum
-----------------------------------------------------------------------------------------------------------
Class B-2 $3,548,000 (1) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class ▇▇▇ ▇▇ ▇/▇ ▇/▇ ▇/▇
===========================================================================================================
--------------
(1) A rate equal to 100% of the Pass Through Rate on the Class B-2 Interest.
The Class B-3 REMIC
-------------------
The Class B-3 Interest will be the sole asset of the Class B-3
REMIC. The following table sets forth characteristics of the Class B-3
Certificates and the Class B3R Interest, together with the minimum
denominations and integral multiples in excess thereof:
===========================================================================================================
Certificate Pass-Through Minimum Integral Multiples in Excess
Principal Balance Rate Denomination of Minimum
-----------------------------------------------------------------------------------------------------------
Class B-3 $3,548,000 (1) $25,000 $1,000
-----------------------------------------------------------------------------------------------------------
Class ▇▇▇ ▇▇ ▇/▇ ▇/▇ ▇/▇
===========================================================================================================
--------------
(1) A rate equal to 100% of the Pass Through Rate on the Class B-3 Interest.
The Class X-N REMIC
-------------------
The Class Master XN Interest will be the sole asset of the Class X-N
REMIC. The following table sets forth characteristics of the Class X-N
Interest and the Class XNR Interest, together with the minimum denominations
and integral multiples in excess thereof:
===========================================================================================================
Class Certificate Pass-Through Minimum Integral Multiples in Excess
Balance Rate Denomination of Minimum
-----------------------------------------------------------------------------------------------------------
Class X-N (1) (1) N/A N/A
-----------------------------------------------------------------------------------------------------------
Class XNR $0 N/A N/A N/A
===========================================================================================================
-11-
--------------
(1) The Class X-N Interest will have a notional balance equal to the notional balance of the Class
Master XN Interest, and a rate equal to 100% of the Pass Through Rate on the Class Master XN Interest. As
described more fully in section 9.01 of the Agreement, the Class X Certificates and Class N Certificates
when owned by two separate entities will be treated as a partnership for federal income tax purposes. As
described more fully in section 9.01 of the Agreement, (a) the Class X Certificate will have a notional
balance equal to the notional balance of the Class X-N Interest, and a rate equal to 100% of the Pass
Through Rate on the Class X-N Interest less the amount payable on the Class N Certificate, and (b) the
Class N Certificates will have an original notional amount equal to $8,000,000 and a pass-through rate of
8.353% per annum.
The following provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans
to be distributed from the Subsidiary REMIC to the Intermediate REMIC, from
the Intermediate REMIC to the Master REMIC and, except in the case of the
Class B-2 Interest, Class B-3 Interest and Class Master XN Interest, from the
Master REMIC to each Class of Certificates. In addition, in the case of the
Class B-2 Interest, Class B-3 Interest and Class Master XN Interest, all
interest and principal collections will be treated as paid to the Class B-2
REMIC, the Class B-3 REMIC and the Class X-N REMIC on behalf of the Class B-2
Certificate, the Class B-3 Certificate, and the Class X and Class N
Certificates, respectively. The Preliminary Statement will be interpreted and
applied consistently with such intent.
For any purpose for which the pass-through rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the pass-through rates for
each of the interests issued by the Subsidiary REMIC, the Intermediate REMIC,
the Master REMIC, the Class B-2 REMIC, the Class B-3 REMIC and the Class X-N
REMIC such rates shall be adjusted to equal a monthly day count convention
based on the actual number of days in the preceding Due Period and a 360-day
year so that the Mortgage Loans and all regular interests will be using the
same monthly day count convention.
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, interest
on the Floating Rate Certificates will be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day
year. Interest on the Fixed Rate Certificates and the Class N and Class X
Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
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"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to which
any portion of a Monthly Payment is, as of the last day of the prior
Collection Period, two months or more past due, each Mortgage Loan in
foreclosure, all REO Property and each Mortgage Loan for which the Mortgagor
has filed for bankruptcy after the Closing Date.
"Account": Any of the Collection Account, the Distribution Account,
the Interest Rate Cap Account and the Basis Risk Reserve Fund.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of Offered Certificates (other than the Class A-IO
Certificates) and Class B-2, Class B-3 and Class N Certificates, an amount
equal to the interest accrued at the applicable rate set forth or described
opposite such Class in the table in the Preliminary Statement during the
related Interest Accrual Period on the Certificate Principal Balance or
Notional Amount of such Class of Certificates, reduced by (except with respect
to the Class N Certificates) such Class' Interest Percentage of Relief Act
Interest Shortfalls for such Distribution Date.
"Actuarial Mortgage Loan": Any Mortgage Loan other than a Simple
Interest Mortgage Loan.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on an Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjusted Net WAC Rate" : With respect to any Distribution Date, a
per annum rate equal to the weighted average of the Group 1 Adjusted Net WAC
Rate, the Group 2 Adjusted Net WAC Rate and the Group 3 Adjusted Net WAC Rate
for such Distribution Date (weighted on the basis of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1, Loan Group 2 and Loan
Group 3, respectively, in each case as of the last day of the related
Collection Period).
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date, on which the Mortgage Interest Rate of an
Adjustable-Rate 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 Actuarial Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Distribution Date pursuant to
Section 4.07.
"Advance Facility": As defined in Section 3.29(a) hereof.
"Advance Facility Notice": As defined in Section 3.29(b) hereof.
"Advance Financing Person": As defined in Section 3.29(a) hereof.
"Advance Reimbursement Amounts": As defined in Section 3.29(b)
hereof.
-13-
"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
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto,
including with respect to each FHA Loan, the FHA Regulations and the related
FHA Insurance Contract.
"Applied Realized Loss Amount": As defined in Section 4.03 hereof.
"Arrearage": With respect to a Delinquent Mortgage Loan, the total
amount of scheduled monthly payments due thereon on or before the Cut-off Date
that were not received prior to the Cut-off Date but for which advances of
principal and interest were made, plus any unreimbursed Servicing Advances as
of the Cut-off Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due and
collected during the related Collection Period and received by the Trustee one
Business Day prior to the related Distribution Date, (b) any unscheduled
recoveries of principal and interest and Principal Prepayments (excluding
prepayment penalties and amounts received in respect of Arrearages), Insurance
Proceeds and Liquidation Proceeds in respect of the Mortgage Loans during the
related Prepayment Period, (c) the aggregate of any Advances made by the
Servicer for such Distribution Date and any Compensating Interest for such
Distribution Date, (d) the Purchase Price for any repurchased Mortgage Loan
deposited to the Collection Account during the related Prepayment Period, (e)
any Substitution Adjustment Amounts deposited in the Collection Account during
the related Prepayment Period, and (f) on the Distribution Date on which the
Trust is to be terminated pursuant to Section 10.01 hereof, the Termination
Price, over (ii) the sum of (a) amounts reimbursable or payable to the
Servicer pursuant to Section 3.05, (b) Stayed Funds, (c) the Servicing Fee,
and (d) amounts deposited in the Collection Account or the Distribution
Account, as the case may be, in error.
"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.
-14-
"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": Title 11 of the United States Code, as amended.
"Basis Risk Reserve Fund Deposit": With respect to each Distribution
Date, an amount equal to the lesser of: (1) the sum of (a) the sum of any Net
Rate Carryover Amounts for such Distribution Date that remain unpaid following
the distribution of amounts in the Interest Rate Cap Account on such
Distribution Date pursuant to Section 4.09(e) and (b) the Required Basis Risk
Reserve Fund Deposit; and (2) any Monthly Excess Cashflow Amount remaining on
such Distribution Date following the distributions pursuant to Section
4.02(b)(i)-(xvi).
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the
Closing Date, the Class 1-A1, Class 2-A1, Class 3-F1, Class A-IO, Class ▇-▇,
▇▇▇▇▇ ▇-▇▇, Class M-2F and Class B-1 Certificates shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, the State of New York,
the State of Texas or in the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class A-IO, Class N, Class X and Residual
Certificates) and any Distribution Date, the Original Class Certificate
Principal Balance reduced by the sum of (i) all amounts actually distributed
in respect of principal of such Class on all prior Distribution Dates and (ii)
Applied Realized Loss Amounts allocated thereto. The Class A-IO, Class N,
Class X and Residual Certificates do not have a Certificate Principal Balance.
With respect to any Certificate (other than a Class A-IO, Class N, Class X or
a Residual Certificate) of a Class and any Distribution Date, the portion of
the Certificate Principal Balance of such Class represented by such
Certificate equal to the product of the Percentage Interest evidenced by such
Certificate and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a
Residual Certificate for any purpose hereof.
-15-
"Class": Collectively, Certificates or REMIC Regular Interests 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 1-A1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.47% per annum, and (ii) following
the Optional Termination Date, 0.94% per annum.
"Class 1-A1 Confirmation": The Confirmation dated December 23, 2002,
evidencing a transaction between the Interest Rate Cap Provider and the
Trustee with respect to the Class 1-A1 Certificates, a form of each of which
is attached hereto as Exhibit R.
"Class 1-A1 Interest Rate Cap Agreement": An interest rate cap
agreement between the Trustee and the Interest Rate Cap Provider with respect
to the Class 1-A1 Certificates, the terms of which are set forth in the Class
1-A1 Confirmation, which incorporates the terms of the ISDA Master Agreement.
"Class 1-A1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class 1-A1 Certificate Margin for such Distribution Date.
"Class 1-A1 Principal Allocation Percentage" means, with respect to
any Distribution Date, the percentage equivalent of a fraction, the numerator
of which is (x) the Group 1 Principal Remittance Amount for such Distribution
Date, and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
"Class 1-A1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the Certificate Principal Balance of the Class 1-A1
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 53.50% and (ii) the Group 1 Balance as of the last
day of the related Collection Period and (B) the excess of the Group 1 Balance
as of the last day of the related Collection Period over the product of (i)
0.50% and (ii) the Group 1 Balance on the Cut-off Date.
"Class 2-A1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.50% per annum, and (ii) following
the Optional Termination Date, 1.00% per annum.
"Class 2-A1 Confirmation": The Confirmation dated December 23, 2002,
evidencing a transaction between the Interest Rate Cap Provider and the
Trustee with respect to the Class 2-A1 Certificates, a form of each of which
is attached hereto as Exhibit S.
"Class 2-A1 Interest Rate Cap Agreement": An interest rate cap
agreement between the Trustee and the Interest Rate Cap Provider with respect
to the Class 2-A1 Certificates, the terms of which are set forth in the Class
2-A1 Confirmation, which incorporates the terms of the ISDA Master Agreement.
-16-
"Class 2-A1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class 2-A1 Certificate Margin for such Distribution Date.
"Class 2-A1 Principal Allocation Percentage": With respect
to any Distribution Date, the percentage equivalent of a fraction, the
numerator of which is (x) the Group 2 Principal Remittance Amount for such
Distribution Date, and the denominator of which is (y) the Principal
Remittance Amount for such Distribution Date.
"Class 2-A1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the Certificate Principal Balance of the Class 2-A1
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 53.50% and (ii) the Group 2 Balance as of the last
day of the related Collection Period and (B) the excess of the Group 2 Balance
as of the last day of the related Collection Period over the product of (i)
0.50% and (ii) the Group 2 Balance on the Cut-off Date.
"Class 3-F1 Pass-Through Rate": For each Distribution Date (i) on or
prior to the Optional Termination Date, 4.03% per annum, and (ii) following
the Optional Termination Date, 4.53% per annum.
"Class 3-F1 Principal Allocation Percentage" means, with respect to
any Distribution Date, the percentage equivalent of a fraction, the numerator
of which is (x) the Group 3 Principal Remittance Amount for such Distribution
Date, and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
"Class 3-F1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the Certificate Principal Balance of the Class 3-F1
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 53.50% and (ii) the Group 3 Balance as of the last
day of the related Collection Period and (B) the excess of the Group 3 Balance
as of the last day of the related Collection Period over the product of (i)
0.50% and (ii) the Group 3 Balance on the Cut-off Date.
"Class A-IO Pass-Through Rate": With respect to the first through
the twelfth Distribution Date, 3.25% per annum, and with respect to any
Distribution Date thereafter, 0.00%.
"Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, Exhibit B-2 and Exhibit B-3, executed by the Trustee on behalf of
the Trust and authenticated and delivered by the Certificate Registrar,
representing the right to distributions as set forth herein and therein.
"Class B Certificateholders": Collectively, the Holders of the Class
B Certificates.
"Class B-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.75% per annum, and (ii) following
the Optional Termination Date, 5.625% per annum.
-17-
"Class B-1 Confirmation": The Confirmation dated December 23, 2002,
evidencing a transaction between the Interest Rate Cap Provider and the
Trustee with respect to the Class B-1 Certificates, a form of each of which is
attached hereto as Exhibit V.
"Class B-1 Interest Rate Cap Agreement": An interest rate cap
agreement between the Trustee and the Interest Rate Cap Provider with respect
to the Class B-1 Certificates, the terms of which are set forth in the Class
B-1 Confirmation, which incorporates the terms of the ISDA Master Agreement.
"Class B-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class B-1 Certificate Margin for such Distribution Date.
"Class B-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment 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
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balances of the Class M-2V and Class
M-2F Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), and (iv) the
Certificate Principal Balance of the Class B-1 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 92.00%
and (ii) the Pool Balance as of the last day of the related Collection Period
and (B) the excess of the Pool Balance as of the last day of the related
Collection Period over the product of (i) 0.50% and (ii) the Pool Balance on
the Cut-off Date.
"Class B-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.75% per annum, and (ii) following
the Optional Termination Date, 5.625% per annum.
"Class B-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum if (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class B-2 Certificate Margin for such Distribution Date.
"Class B-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment 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
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balances of the Class M-2V and Class
M-2F Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date), and (v) the Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 94.50% and (ii) the Pool Balance as of the last
-18-
day of the related Collection Period and (B) the excess of the Pool Balance as
of the last day of the related Collection Period over the product of (i) 0.50%
and (ii) the Pool Balance on the Cut-off Date.
"Class B-3 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.75% per annum, and (ii) following
the Optional Termination Date, 5.625% per annum.
"Class B-3 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class B-3 Certificate Margin for such Distribution Date.
"Class B-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment 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
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balances of the Class M-2V and Class
M-2F Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date), (v) the Certificate Principal Balance of the Class B-2 Certificates
(after taking into account the payment of the Class B-2 Principal Distribution
Amount on such Distribution Date), and (vi) the Certificate Principal Balance
of the Class B-3 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 97.00% and (ii) the Pool Balance as
of the last day of the related Collection Period and (B) the excess of the
Pool Balance as of the last day of the related Collection Period over the
product of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class B-2 Regular Interest": As defined in the Preliminary
Statement.
"Class B-3 Regular Interest": As defined in the Preliminary
Statement.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, Exhibit C-3 and Exhibit C-4, executed by the Trustee on behalf of
the Trust and authenticated and delivered by the Certificate Registrar,
representing the right to distributions as set forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the Class
M Certificates.
"Class M-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.25% per annum, and (ii) following
the Optional Termination Date, 1.875% per annum.
"Class M-1 Confirmation": The Confirmation dated December 23, 2002,
evidencing a transaction between the Interest Rate Cap Provider and the
Trustee with respect to the Class M-1 Certificates, a form of each of which is
attached hereto as Exhibit T.
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"Class M-1 Interest Rate Cap Agreement": An interest rate cap
agreement between the Trustee and the Interest Rate Cap Provider with respect
to the Class M-1 Certificates, the terms of which are set forth in the Class
M-1 Confirmation, which incorporates the terms of the ISDA Master Agreement.
"Class M-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class M-1 Certificate Margin for such Distribution Date.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment 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) 69.00%
and (ii) the Pool Balance as of the last day of the related Collection Period
and (B) the excess of the Pool Balance as of the last day of the related
Collection Period over the product of (i) 0.50% and (ii) the Pool Balance on
the Cut-off Date.
"Class M-2 Certificates": The Class M-2V and Class M-2F
Certificates.
"Class M-2V Confirmation": The Confirmation dated December 23, 2002,
evidencing a transaction between the Interest Rate Cap Provider and the
Trustee with respect to the Class M-2V Certificates, a form of each of which
is attached hereto as Exhibit U.
"Class M-2V Interest Rate Cap Agreement": An interest rate cap
agreement between the Trustee and the Interest Rate Cap Provider with respect
to the Class M-2V Certificates, the terms of which are set forth in the Class
M-2V Confirmation, which incorporates the terms of the ISDA Master Agreement.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment 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
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balances of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 83.00% and (ii) the Pool Balance as of the last day
of the related Collection Period and (B) the excess of the Pool Balance as of
the last day of the related Collection Period minus the product of (i) 0.50%
and (ii) the Pool Balance on the Cut-off Date.
"Class M-2F Pass-Through Rate": For each Distribution Date, 5.82%
per annum.
"Class M-2V Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 2.25% per annum, and (ii) following
the Optional Termination Date, 3.375% per annum.
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"Class M-2V Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the sum of (i) LIBOR as of the related LIBOR Determination
Date and (ii) the Class M-2V Certificate Margin for such Distribution Date.
"Class N Certificate": Any one of the Certificates with an "N"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-5, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class R Certificate": Any one of the Class R-1 and Class R-2
Certificates.
"Class R-1 Certificate": Any one of the Certificates with an "R-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class R-2 Certificate": Any one of the Certificates with an "R-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class X Certificate": Any one of the Certificates with an "X"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-6, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class X Distributable Amount": With respect to any Distribution
Date, the excess of (i) the aggregate of amounts distributable on the Class
X-N Interest for such Distribution Date as provided in the Preliminary
Statement, over (ii) the aggregate of amounts distributable to the Class N
Certificates pursuant to Section 4.02(b).
"Class Master XN Interest": As defined in the Preliminary Statement.
"Class X-N Interest": As defined in the Preliminary Statement.
"Closing Date": December 23, 2002.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained
by the Servicer pursuant to Section 3.04, which shall be entitled "Collection
Account, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer for the Trust under the Pooling
and Servicing Agreement dated as of December 1, 2002 among Financial Asset
Securities Corp., as Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller, ▇▇▇▇▇▇ Loan Servicing LP, as Servicer, and
JPMorgan Chase Bank, as Trustee, in trust for registered Holders of 2002-CB6
Trust, C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6," and
which must be an Eligible Account.
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"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar month preceding the month in which
such Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
"Combined Loan-to-Value Ratio": As of any date and Mortgage Loan,
the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan plus the principal balance of any
related senior mortgage loan or loans, and the denominator of which is the
Value of the related Mortgaged Property.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Confirmation": Any of the Class 1-A1 Confirmation, the Class 2-A1
Confirmation, the Class M-1 Confirmation, the Class M-2V Confirmation and the
Class B-1 Confirmation.
"Conventional Mortgage Loan": Any Mortgage Loan that is not an FHA
Loan.
"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 ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Institutional Trust Services, C-BASS
2002-CB6, or at such other address as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Servicer and the
Seller.
"Custodial Agreement": The Custodial Agreement, dated as of December
1, 2002, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.
"Custodian": The Bank of New York, a New York banking corporation,
or any successor custodian appointed pursuant to the terms of the Custodial
Agreement.
"Cut-off Date": December 1, 2002.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application
of funds received or advanced on or before such date (or as of the applicable
date of substitution with respect to an Eligible Substitute Mortgage Loan).
"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.
"Default Rate": As defined in any Interest Rate Cap Agreement.
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"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deferred Interest": With respect to any Mortgage Loan identified on
the Mortgage Loan Schedule as having the possibility of negative amortization,
the current portion of interest not currently paid by the Mortgagor that is
added to the principal balance of such Mortgage Loan.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding principal balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a Due
Date with respect to which such monthly payment is not made by the close of
business on the next scheduled Due Date for such Mortgage Loan.
"Depositor": Financial Asset Securities Corp., a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as
a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding
such 10th 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 Trust other than through
an Independent Contractor; provided, however, that the Trustee (nor the
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee (or the Servicer under this Agreement)
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.
"Disproportionate Holder": As defined in Section 9.01(n) hereof.
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"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 possession of
the United States, 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) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided
by nationally recognized counsel to the Trustee that the holding of an
ownership interest in a Residual Certificate by such Person may cause the
Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the
transfer of an ownership interest in a Residual Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof if all of its activities are
subject to tax and a majority of its board of directors is not selected by a
governmental unit. The term "United States," "state" and "international
organization" shall have the meanings set forth in Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, JPMorgan Chase Bank, as Trustee, in trust for the
registered Holders of 2002-CB6 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2002-CB6" 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 on January 27, 2003.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any
grace period.
"Early Termination Date": As defined in any Interest Rate Cap
Agreement.
"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 in one of the top three rating categories by each of the
Rating Agencies at the time any amounts are held on deposit therein, (ii) an
account or accounts the deposits in which are fully insured by the FDIC (to
the limits established by such corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Certificateholders
will have a claim with respect to the funds in such account or a perfected
first priority security interest against such collateral (which shall be
limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution with
which such account is maintained, (iii) a trust account or accounts maintained
with the trust
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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.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for
a Defective 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, and not more
than 5% less than, the outstanding principal balance of the Defective Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) have a Mortgage Interest Rate, with respect to a Fixed-Rate
Mortgage Loan, not less than the Mortgage Interest Rate of the Defective
Mortgage Loan and not more than 1% in excess of the Mortgage Interest Rate of
such Defective Mortgage Loan, (iii) if an Adjustable-Rate Mortgage Loan, have
a Maximum Loan Rate not less than the Maximum Loan Rate for the Defective
Mortgage Loan, (iv) if an Adjustable-Rate Mortgage Loan, have a Minimum Loan
Rate not less than the Minimum Loan Rate of the Defective Mortgage Loan, (v)
if an Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater
than the Gross Margin of the Defective Mortgage Loan, (vi) have the same Due
Date as the Defective Mortgage Loan; (vii) if an Adjustable-Rate Mortgage
Loan, have a next Adjustment Date not more than two months later than the next
Adjustment Date on the Defective Mortgage Loan, except in the case of any
Mortgage Loan which has an Arrearage due to the application of any related
forbearance plan with respect to such Mortgage Loan, an Eligible Substitute
Mortgage Loan must have all Adjustment Dates occurring during the same
Interest Accrual Period during which Adjustment Dates occur with respect to
the substituted Mortgage Loan, (viii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Defective
Mortgage Loan, (ix) be current as of the date of substitution, (x) have a
Combined Loan-to-Value Ratio as of the date of substitution equal to or lower
than the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of
such date, (xi) have a risk grading determined by the Seller at least equal to
the risk grading assigned on the Defective Mortgage Loan, (xii) have been
reunderwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Defective Mortgage Loan, and (xiii) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective 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, the risk
gradings described in clause (xi) 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, the Combined
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 (xiii) hereof
must be satisfied as to each Eligible Substitute Mortgage Loan or in the
aggregate, as the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
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"ERISA-Restricted Certificates": Any of the Class M-1, Class M-2,
Class B-1, Class B-2, Class B-3, Class N, Class X, Class R-1 and Class R-2
Certificates, and any Certificates of any other Class that has ceased to
satisfy the requirements of Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487 (August 22, 2002) or any substantially similar exemption.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Expense Fee Rate": With respect to each Mortgage Loan and any
Distribution Date, the sum of (i) the Trustee Fee Rate and (ii) the Servicing
Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution Date,
the lesser of (x) the Monthly Excess Interest Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration, an agency within HUD.
"FHA Approved Mortgagee": Those institutions which are approved by
FHA to act as servicer and mortgagee of record pursuant to FHA Regulations.
"FHA Insurance Contract" or "FHA Insurance": The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
"FHA Loan": A Mortgage Loan which is the subject of an FHA Insurance
Contract as evidenced by a Mortgage Insurance Certificate.
"FHA Regulations": Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by
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the Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
"Fitch": Fitch, Inc. and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the Securities and Exchange Commission.
"Fixed Rate Certificates": The Class 3-F1, Class A-IO and Class M-2F
Certificates.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Floating Rate Certificates": The Class 1-A1, Class 2-A1, Class ▇-▇,
▇▇▇▇▇ ▇-▇▇, Class B-1, Class B-2 and Class B-3 Certificates.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"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 Interest Rate for such Mortgage
Loan.
"Group 1 Adjusted Net WAC Rate": For any Distribution Date, a per
annum rate equal to (a) the Net Mortgage Interest Rate of the Mortgage Loans
in Loan Group 1 minus (b) a fraction, expressed as a percentage, (1) the
numerator of which is equal to the product of (x) the Class A-IO Pass-Through
Rate and (y) the Group Class A-IO Component Notional Balance for Loan Group 1
for such Distribution Date and (2) the denominator of which is equal to the
Group Balance for Loan Group 1 as of the last day of the related Collection
Period. For federal income tax purposes, the Group 1 Adjusted Net WAC Rate
will equal the weighted average rate of the Subsidiary 1 Regular Interests
where, each interest, other than the Class 1-B Interest, is capped at a rate
equal to (a) from the Closing Date to its respective Rate Change Date, the
Group 1 Net WAC Rate minus 3.25%, and (b) after said Rate Change Date, the
Group 1 Net WAC Rate.
"Group 1 Balance": With respect to any Distribution Date, the
aggregate Principal Balance of the Group 1 Mortgage Loans.
"Group 1 Class A-IO Interest Component" means that component of the
Class A-IO Certificates related to the Group 1 Mortgage Loans.
"Group 1 Class A-IO Interest Component Amount" means, with respect
to any Distribution Date and the Group 1 Class A-IO Interest Component, an
amount equal to the excess of (i) the product of (a) the Class A-IO
Pass-Through Rate for such Distribution Date and
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(b) the Group Class A-IO Component Notional Balance for Loan Group 1 and such
Distribution Date over (ii) the Group 1 A-IO Interest Component's Interest
Percentage of Relief Act Interest Shortfalls for such Distribution Date.
"Group 1 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 1
Mortgage Loans or to Compensating Interest paid by the Servicer with respect
to the Group 1 Mortgage Loans.
"Group 1 Net WAC Rate": The weighted average Net Mortgage Interest
Rate of the Group 1 Mortgage Loans.
"Group 1 Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group 1 Principal Remittance Amount
for such Distribution Date minus (y) the amount of any Overcollateralization
Release Amount for such Distribution Date multiplied by the Class 1-A1
Principal Allocation Percentage for such Distribution Date, and (ii) the Extra
Principal Distribution Amount for such Distribution Date multiplied by the
Class 1-A1 Principal Allocation Percentage for such Distribution Date.
"Group 1 Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each payment of principal on a Group 1 Mortgage Loan due during the
related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto, (ii) all
full and partial Principal Prepayments received by the Servicer on the Group 1
Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation
Proceeds allocable to principal actually collected by the Servicer on the
Group 1 Mortgage Loans during the related Prepayment Period, (iv) with respect
to Defective Mortgage Loans that are Group 1 Mortgage Loans repurchased with
respect to such Prepayment Period, the portion of the Purchase Price allocable
to principal, (v) any Substitution Adjustment Amounts received with respect to
Group 1 Mortgage Loans on or prior to the previous Determination Date and not
yet distributed and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal on the Group 1 Mortgage Loans.
"Group 1 Share": (i) Generally, as of any Distribution Date, a
fraction whose numerator is the aggregate Stated Principal Balance of the
Group 1 Mortgage Loans (as of the first day of the related Collection Period)
and whose denominator is the aggregate Stated Principal Balance of the
Mortgage Loans (as of the first day of the related Collection Period).
(ii) Notwithstanding the above, if the sum of (a) the Certificate
Principal Balance of the Class 1-A1 Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share), and (b) the Group 1
Share multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the
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definition of such Group Share) exceeds the aggregate Stated Principal Balance
of the Group 1 Mortgage Loans as of the last day of the related Collection
Period, the Group 1 Share will be reduced (and as described in paragraph (iii)
of the definition of Group 2 Share and Group 3 Share, the Group 2 Share and
Group 3 Share, respectively, will be increased) by a fraction equal to the
amount of such excess divided by the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Collection Period.
(iii) Furthermore, (1) if the sum of (x) the Certificate Principal
Balance of the Class 2-A1 Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) and (y) the Group 2 Share
multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) exceeds the aggregate Stated Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection Period, the Group
1 Share and Group 3 Share will be increased by a fraction equal to the amount
of such excess divided by the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Collection Period, or (2) if
the sum of (x) the Certificate Principal Balance of the Class 3-F1
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) and (y) the Group 3 Share multiplied by the Certificate Principal
Balance of the Subordinate Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) exceeds the Stated
Principal Balance of the Group 3 Mortgage Loans as of the last day of the
related Collection Period, the Group 1 Share and Group 2 Share will be
increased by a fraction equal to the amount of such excess divided by the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Collection Period. An increase resulting from this paragraph (iii)
will be allocated proportionately to the Group 1 Share and Group 2 Share or
Group 3 Share based on their relative values. Notwithstanding the preceding
sentence, the amount increased in this paragraph (iii) will be subject to a
reduction under paragraph (ii) of this definition.
(iv) On any Distribution Date, the sum of the Group 1 Share, Group 2
Share and Group 3 Share for such Distribution Date shall equal 1.00.
"Group 1 Subordinated Amount": The product of (1)(a) the sum of the
principal balance of the Subordinated Certificates, multiplied by (b) the
Group 1 Share, multiplied by (2) the Intermediate REMIC Ratio.
"Group 2 Adjusted Net WAC Rate": For any Distribution Date, a per
annum rate equal to (a) the Net Mortgage Interest Rate of the Mortgage Loans
in Loan Group 2 minus (b) a fraction, expressed as a percentage, (1) the
numerator of which is equal to the product of (x) the Class A-IO Pass-Through
Rate and (y) the Group Class A-IO Component Notional Balance for Loan Group 2
for such Distribution Date and (2) the denominator of which is equal to the
Group Balance for Loan Group 2 as of the last day of the related Collection
Period. For federal income
-29-
tax purposes, the Group 2 Adjusted Net WAC Rate will equal the weighted
average rate of the Subsidiary 2 Regular Interests where, each interest, other
than the Class 2-B Interest, is capped at a rate equal to (a) from the Closing
Date to its respective Rate Change Date, the Group 2 Net WAC Rate minus 3.25%,
and (b) after such Rate Change Date, the Group 2 Net WAC Rate.
"Group 2 Balance": With respect to any Distribution Date, the
aggregate Principal Balance of the Group 2 Mortgage Loans.
"Group 2 Class A-IO Interest Component" means that component of the
Class A-IO Certificates related to the Group 2 Mortgage Loans.
"Group 2 Class A-IO Interest Component Amount" means, with respect
to any Distribution Date and the Group 2 Class A-IO Interest Component, an
amount equal to the excess of (i) the product of (a) the Class A-IO
Pass-Through Rate for such Distribution Date and (b) the Group Class A-IO
Component Notional Balance for Loan Group 2 and such Distribution Date over
(ii) the Group 2 A-IO Interest Component's Interest Percentage of Relief Act
Interest Shortfalls for such Distribution Date.
"Group 2 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 2
Mortgage Loans or to Compensating Interest paid by the Servicer with respect
to the Group 2 Mortgage Loans.
"Group 2 Net WAC Rate": The weighted average Net Mortgage Interest
Rate of the Group 2 Mortgage Loans.
"Group 2 Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group 2 Principal Remittance Amount
for such Distribution Date minus (y) the amount of any Overcollateralization
Release Amount for such Distribution Date multiplied by the Class 2-A1
Principal Allocation Percentage for such Distribution Date, and (ii) the Extra
Principal Distribution Amount for such Distribution Date multiplied by the
Class 2-A1 Principal Allocation Percentage for such Distribution Date.
"Group 2 Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each payment of principal on a Group 2 Mortgage Loan due during the
related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto, (ii) all
full and partial Principal Prepayments received by the Servicer on the Group 2
Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation
Proceeds allocable to principal actually collected by the Servicer on the
Group 2 Mortgage Loans during the related Prepayment Period, (iv) with respect
to Defective Mortgage Loans that are Group 2 Mortgage Loans repurchased with
respect to such Prepayment Period, the portion of the Purchase Price allocable
to principal, (v) any Substitution Adjustment Amounts received with respect to
Group 2 Mortgage Loans on or prior to the previous Determination Date and not
yet distributed and (vi) on the Distribution Date on which the Trust
-30-
is to be terminated in accordance with Section 10.01 hereof, that portion of
the Termination Price in respect of principal on the Group 2 Mortgage Loans.
"Group 2 Share": (i) Generally, as of any Distribution Date, a
fraction whose numerator is the aggregate Stated Principal Balance of the
Group 2 Mortgage Loans (as of the first day of the related Collection Period)
and whose denominator is the aggregate Stated Principal Balance of the
Mortgage Loans (as of the first day of the related Collection Period).
(ii) Notwithstanding the above, if the sum of (a) the Certificate
Principal Balance of the Class 2-A1 Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share), and (b) the Group 2
Share multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share), exceeds the aggregate Stated Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection Period, the Group
2 Share will be reduced (and as described in paragraph (iii) of the definition
of Group 1 Share and Group 3 Share, the Group 1 Share and Group 3 Share,
respectively, will be increased) by a fraction equal to the amount of such
excess divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Collection Period.
(iii) Furthermore, (1) if the sum of (x) the Certificate Principal
Balance of the Class 1-A1 Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) and (y) the Group 1 Share
as of the first day of the related Collection Period multiplied by the
Certificate Principal Balance of the Subordinate Certificates for such
Distribution Date (prior to any actual distributions on such Distribution Date
but assuming that distributions are made in accordance with each Group Share
as determined in paragraph (i) of the definition of such Group Share) exceeds
the aggregate Stated Principal Balance of the Group 1 Mortgage Loans as of the
last day of the related Collection Period, the Group 2 Share and Group 3 Share
will be increased by a fraction equal to the amount of such excess divided by
the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Collection Period, or (2) if the sum of (x) the Certificate
Principal Balance of the Class 3-F1 Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) and (y) the Group 3 Share
as of the last day of the related Collection Period multiplied by the
Certificate Principal Balance of the Subordinate Certificates for such
Distribution Date (prior to any actual distributions on such Distribution Date
but assuming that distributions are made in accordance with each Group Share
as determined in paragraph (i) of the definition of such Group Share) exceeds
the aggregate Stated Principal Balance of the Group 3 Mortgage Loans as of the
last day of the related Collection Period, the Group 1 Share and Group 2 Share
will be increased by a fraction equal to the amount of such excess divided by
the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Collection Period. An increase resulting from this
paragraph (iii) will be allocated proportionately to the Group 2 Share and
Group 1 Share or Group 3 Share based on their relative values. Notwithstanding
the preceding
-31-
sentence, the amount increased in this paragraph (iii) will be subject to a
reduction under paragraph (ii) of this definition.
(iv) On any Distribution Date, the sum of the Group 1 Share, Group 2
Share. and Group 3 Share for such Distribution Date shall equal 1.00.
"Group 2 Subordinated Amount": The product of (1)(a) the sum of the
principal balance of the Subordinated Certificates, multiplied by (b) the
Group 2 Share, multiplied by (2) the Intermediate REMIC Ratio.
"Group 3 Adjusted Net WAC Rate": For any Distribution Date, a per
annum rate equal to (a) the Net Mortgage Interest Rate of the Mortgage Loans
in Loan Group 3 minus (b) a fraction, expressed as a percentage, (1) the
numerator of which is equal to the product of (x) the Class A-IO Pass-Through
Rate and (y) the Group Class A-IO Component Notional Balance for Loan Group 3
for such Distribution Date and (2) the denominator of which is equal to the
Group Balance for Loan Group 3 as of the last day of the related Collection
Period. For federal income tax purposes, the Group 3 Adjusted Net WAC Rate
will equal the weighted average rate of the Subsidiary 3 Regular Interests
where, each interest, other than the Class 3-B Interest, is capped at a rate
equal to (a) from the Closing Date to its respective Rate Change Date, the
Group 3 Net WAC Rate minus 3.25%, and (b) after such Rate Change Date, the
Group 3 Net WAC Rate.
"Group 3 Balance": With respect to any Distribution Date, the
aggregate Principal Balance of the Group 3 Mortgage Loans.
"Group 3 Class A-IO Interest Component" means that component of the
Class A-IO Certificates related to the Group 3 Mortgage Loans.
"Group 3 Class A-IO Interest Component Amount" means, with respect
to any Distribution Date and the Group 3 Class A-IO Interest Component, an
amount equal to the excess of (i) the product of (a) the Class A-IO
Pass-Through Rate for such Distribution Date and (b) the Group Class A-IO
Component Notional Balance for Loan Group 3 and such Distribution Date over
(ii) the Group 3 A-IO Interest Component's Interest Percentage of Relief Act
Interest Shortfalls for such Distribution Date.
"Group 3 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 3
Mortgage Loans or to Compensating Interest paid by the Servicer with respect
to the Group 3 Mortgage Loans.
"Group 3 Net WAC Rate": The weighted average Net Mortgage Interest
Rate of the Group 3 Mortgage Loans.
"Group 3 Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group 3 Principal Remittance Amount
for such Distribution Date minus (y) the amount of any Overcollateralization
Release Amount for such Distribution Date multiplied by the Class 3-F1
Principal Allocation Percentage for such Distribution Date, and (ii) the Extra
Principal Distribution Amount for such Distribution Date multiplied by the
Class 3-F1 Principal Allocation Percentage for such Distribution Date.
-32-
"Group 3 Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each payment of principal on a Group 3 Mortgage Loan due during the
related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto, (ii) all
full and partial Principal Prepayments received by the Servicer on the Group 3
Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation
Proceeds allocable to principal actually collected by the Servicer on the
Group 3 Mortgage Loans during the related Prepayment Period, (iv) with respect
to Defective Mortgage Loans that are Group 3 Mortgage Loans repurchased with
respect to such Prepayment Period, the portion of the Purchase Price allocable
to principal, (v) any Substitution Adjustment Amounts received with respect to
Group 3 Mortgage Loans on or prior to the previous Determination Date and not
yet distributed and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal on the Group 3 Mortgage Loans.
"Group 3 Share": (i) Generally, as of any Distribution Date, a
fraction whose numerator is the aggregate Stated Principal Balance of the
Group 3 Mortgage Loans (as of the first day of the related Collection Period)
and whose denominator is the aggregate Stated Principal Balance of the
Mortgage Loans (as of the first day of the related Collection Period).
(ii) Notwithstanding the above, if the sum of (a) the Certificate
Principal Balance of the Class 3-F1 Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share), and (b) the Group 3
Share multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share), exceeds the aggregate Stated Principal Balance of the Group 3
Mortgage Loans as of the last day of the related Collection Period, the Group
3 Share will be reduced (and as described in paragraph (iii) of the definition
of Group 1 Share and Group 2 Share, the Group 1 Share and Group 2 Share,
respectively, will be increased) by a fraction equal to the amount of such
excess divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Collection Period.
(iii) Furthermore, (1) if the sum of (x) the Certificate Principal
Balance of the Class 1-A1 Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) and (y) the Group 1 Share
multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) exceeds the aggregate Stated Principal Balance of the Group 1
Mortgage Loans as of the last day of the related Collection Period, the Group
2 Share and Group 3 Share will be increased by a fraction equal to the amount
of such excess divided by the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Collection Period, or (2) if
the sum of (x) the Certificate Principal Balance of the Class 2-A1
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Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) and (y) the Group 2 Share multiplied by the Certificate Principal
Balance of the Subordinate Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) exceeds the aggregate
Stated Principal Balance of the Group 2 Mortgage Loans as of the last day of
the related Collection Period, the Group 1 Share and Group 3 Share will be
increased by a fraction equal to the amount of such excess divided by the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Collection Period. An increase resulting from this paragraph (iii)
will be allocated proportionately to the Group 1 Share and Group 2 Share or
Group 3 Share based on their relative values. Notwithstanding the preceding
sentence, the amount increased in this paragraph (iii) will be subject to a
reduction under paragraph (ii) of this definition.
(iv) On any Distribution Date, the sum of the Group 1 Share, Group 2
Share. and Group 3 Share for such Distribution Date shall equal 1.00.
"Group 3 Subordinated Amount": The product of (1)(a) the sum of the
principal balance of the Subordinated Certificates, multiplied by (b) the
Group 3 Share, multiplied by (2) the Intermediate REMIC Ratio.
"Group Balance": With respect to Loan Group 1, Loan Group 2 and Loan
Group 3, the Group 1 Balance, the Group 2 Balance and the Group 3 Balance,
respectively.
"Group Cap": With respect to any Loan Group and Distribution Date, a
per annum rate equal to the excess of (i) the weighted average Net Mortgage
Interest Rate for the Mortgage Loans in such Loan Group (weighted on the basis
of the principal balances of the related Mortgage Loans as of the first day of
the related Collection Period) over (ii) a fraction, expressed as a
percentage, (A) the numerator of which is the product of (1) 12 and (2) the
Group Class A-IO Component Amount for such Loan Group and Distribution Date
and (B) the denominator of which is the Group Balance for such Loan Group as
of the first day of the related Collection Period; such result to be adjusted
as necessary to an effective rate reflecting the accrual of interest on an
actual/360 basis.
"Group Class A-IO Interest Component": The Group 1 Class A-IO
Interest Component, the Group 2 Class A-IO Interest Component or the Group 3
Class A-IO Interest Component, as applicable.
"Group Class A-IO Interest Component Amount": The Group 1 Class A-IO
Interest Component Amount, the Group 2 Class A-IO Interest Component Amount or
the Group 3 Class A-IO Interest Component Amount, as applicable.
"Group Class A-IO Component Notional Balance": With respect to any
Loan Group and Distribution Date, the lesser of (i) the Group Class A-IO
Component Scheduled Notional Balance for such Loan Group and Distribution Date
and (ii) the Group Balance for such Loan Group as of the last day of the
related Collection Period.
-34-
"Group Class A-IO Component Scheduled Notional Balance": With
respect to any Loan Group and Distribution Date, an amount equal to:
---------------------------------------------------------------------------------------------------
Distribution Date Loan Group 1 Loan Group 2 Loan Group 3
---------------------------------------------------------------------------------------------------
January 2003 $70,589,000 $44,658,000 $101,337,000
---------------------------------------------------------------------------------------------------
February 2003 $60,358,000 $38,186,000 $87,359,000
---------------------------------------------------------------------------------------------------
March 2003 $60,358,000 $38,186,000 $87,359,000
---------------------------------------------------------------------------------------------------
April 2003 $57,289,000 $36,244,000 $82,700,000
---------------------------------------------------------------------------------------------------
May 2003 $52,174,000 $33,008,000 $76,876,000
---------------------------------------------------------------------------------------------------
June 2003 $49,105,000 $31,066,000 $72,217,000
---------------------------------------------------------------------------------------------------
July 2003 $45,013,000 $28,478,000 $66,393,000
---------------------------------------------------------------------------------------------------
August 2003 $42,967,000 $27,183,000 $62,899,000
---------------------------------------------------------------------------------------------------
September 2003 $40,921,000 $25,889,000 $58,240,000
---------------------------------------------------------------------------------------------------
October 2003 $37,852,000 $23,947,000 $54,745,000
---------------------------------------------------------------------------------------------------
November 2003 $34,783,000 $22,005,000 $51,251,000
---------------------------------------------------------------------------------------------------
December 2003 $32,737,000 $20,711,000 $47,756,000
---------------------------------------------------------------------------------------------------
January 2004 and $0 $0 $0
thereafter
---------------------------------------------------------------------------------------------------
"Group Share": Any of the Group 1 Share, Group 2 Share or Group 3
Share, as applicable.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Servicer and
their respective Affiliates, (ii) 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 (iii) 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 the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
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 percent or more of any Class of Certificates), so
long as the Trust Fund does not receive or derive any income from such Person
and provided that the relationship between such Person and the Trust Fund 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, which Opinion of Counsel shall be
an expense of the Trust
-35-
Fund, 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
Certificate other than a Class A-IO, Class N, Class X or Residual Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Notional Amount": With respect to any Class A-IO or Class N
Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Initial Overcollateralization Amount": $4,257,685.01.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the 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 Accrual Period": With respect to any Distribution Date and
(i) with respect to the Floating Rate Certificates, the period from the
preceding Distribution Date to the day prior to the current Distribution Date
(or, in the case of the first Distribution Date, the period from the Closing
Date through January 26, 2003), and (ii) with respect to (x) the Fixed Rate
Certificates and the Class N and Class X Certificates, the calendar month
immediately preceding the month in which such Distribution Date occurs.
"Interest Carry Forward Amount": (i) for any Class of Certificates
(other than the Class A-IO, Class X and Residual Certificates) and any
Distribution Date, the sum of (a) the excess, if any, of the Accrued
Certificate Interest and any Interest Carry Forward Amount for the prior
Distribution Date, over the amount in respect of interest actually distributed
on such Class on such prior Distribution Date and (b) (1) with respect to the
Floating Rate Certificates, interest on such excess at the applicable
Pass-Through Rate for the actual number of days elapsed on the basis of a
360-day year since the prior Distribution Date, and (2) with respect to the
Class 3-F1 and Class M-2F Certificates, 30 days' interest on such excess at
the applicable Pass-Through Rate on the basis of a 360-day year consisting of
twelve 30-day months, and (ii) for each Group Class A-IO Interest Component
and any Distribution Date, the excess, if any of the related Group Class A-IO
Interest Component Amount and any Interest Carry Forward Amount, in each case
for the prior Distribution Date, over the amount actually distributed on the
Class A-IO Certificates in respect of such Group Class A-IO Interest Component
on the prior Distribution Date.
-36-
"Interest Percentage": With respect to the Class B-2 and Class B-3
Certificates and any Class of Offered Certificates (other than the Class A-IO
Certificates) and any Distribution Date, the ratio (expressed as a decimal
carried to six places) of the Accrued Certificate Interest for such Class to
the sum of the Accrued Certificate Interest for the Offered Certificates
(other than the Class A-IO Certificates) and the Class B-2 and Class B-3
Certificates and the Group 1 Class A-IO Interest Component Amount, the Group 2
Class A-IO Interest Component Amount and the Group 3 Class A-IO Interest
Component Amount, in each case with respect to such Distribution Date and
without taking into account any Relief Act Interest Shortfalls for such
Distribution Date. With respect to any Distribution Date and any Group Class
A-IO Interest Component, the ratio (expressed as a decimal carried to six
places) of the Group Class A-IO Interest Component Amount for such Group Class
A-IO Interest Component to the sum of the Accrued Certificate Interest for all
classes and the Group 1 Class A-IO Interest Component Amount, the Group 2
Class A-IO Interest Component Amount and the Group 3 Class A-IO Interest
Component Amount, in each case with respect to such Distribution Date and
without taking into account any Relief Act Interest Shortfalls for such
Distribution Date.
"Interest Rate Cap Account": The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.09 in the name
of the Trustee for the benefit of the Certificateholders which shall be
entitled and designated "Interest Rate Cap Account, JPMorgan Chase Bank, as
Trustee, in trust for the registered Holders of 2002-CB6 Trust, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2002-CB6." Funds in the
Interest Rate Cap Account shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement. The Interest Rate Cap
Account will not be an asset of any REMIC. Ownership of the Interest Rate Cap
Account is evidenced by the Class X-N Interest.
"Interest Rate Cap Agreement": Any of the Class 1-A1 Interest Rate
Cap Agreement, the Class 2-A1 Interest Rate Cap Agreement, the Class M-1
Interest Rate Cap Agreement, the Class M-2V Interest Rate Cap Agreement and
the Class B-1 Interest Rate Cap Agreement.
"Interest Rate Cap Agreement Termination Date": With respect to each
Interest Rate Cap Agreement, the Distribution Date occurring in the calendar
month indicated in the following table:
-------------------------------------------------------------------------------------------
Interest Rate Cap Agreement Month of Interest Rate Cap
Agreement Termination Date
-------------------------------------------------------------------------------------------
Class 1-A1 Interest Rate Cap Agreement December 2004
-------------------------------------------------------------------------------------------
Class 2-A1 Interest Rate Cap Agreement December 2009
-------------------------------------------------------------------------------------------
Class M-1 Interest Rate Cap Agreement February 2006
-------------------------------------------------------------------------------------------
Class M-2V Interest Rate Cap Agreement February 2006
-------------------------------------------------------------------------------------------
Class B-1 Interest Rate Cap Agreement February 2006
-------------------------------------------------------------------------------------------
"Interest Rate Cap Provider": Swiss Re Financial Products
Corporation or any successor thereto.
-37-
"Intermediate REMIC Ratio": As of the Closing Date, 1/40.
Notwithstanding the above, the Intermediate REMIC Ratio may be reduced if a
reduction in any Group's I-Sub Interests results in the quotient of (A) the
sum of such Group's I-Sub Interests divided by 4, divided by (B) the product
of the Intermediate REMIC Ratio and (C) one over the respective Group Share,
does not equal the principal balance of the Subordinated Certificates. In such
a case, the Intermediate Ratio will be reduced in order to ensure that the
principal balance does equal the formula above.
"Intermediate REMIC Regular Interest": As defined in the Preliminary
Statement.
"ISDA": International Swaps and Derivatives Association, Inc.
"ISDA Master Agreement": The Master Agreement
(Multicurrency-CrossBorder) in the form published by ISDA.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any
related Collection 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 Collection Period and not
previously recovered.
"Lender": As defined in Section 3.29(a) hereof.
"LIBOR": With respect to each Interest Accrual Period, the rate
determined by the Trustee on the related LIBOR Determination Date on the basis
of the 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
LIBOR Determination Date. If no such quotations are available on an LIBOR
Determination Date, LIBOR for the related Interest Accrual Period will be
established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the related Interest Accrual
Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee after
consultation with the Depositor, as of 11:00 A.M., New York City time, on
such date for loans in U.S. Dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered Certificates; and
(iii) If no such quotations can be obtained, LIBOR for the related
Interest Accrual Period shall be LIBOR for the prior Distribution Date.
-38-
"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.
"LIBOR Determination Date": With respect to the Floating Rate
Certificates, (i) for the first Distribution Date, the second LIBOR Business
Day preceding the Closing Date and (ii) for each subsequent Distribution Date,
the second LIBOR Business Day prior to the immediately preceding Distribution
Date.
"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 and Insurance Proceeds which
it expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Fund by reason of its being purchased,
sold or replaced pursuant to or as contemplated by Section 2.03 or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or
purchased pursuant to Section 3.13 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
or (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise.
"Liquidation Report": As to any Distribution Date, the report with
respect to any Liquidated Mortgage Loans for such Distribution Date in such
form and containing such information as is agreed to by the Servicer and the
Trustee.
"Loan Group": Any of Loan Group 1, Loan Group 2 or Loan Group 3, as
applicable.
"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 or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of
the related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Master REMIC Regular Interest": As defined in the Preliminary
Statement.
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"Maximum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.
"Minimum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": With respect to each Distribution
Date, the sum of the Monthly Excess Interest Amount for such Distribution
Date, the Overcollateralization Release Amount for such Distribution Date and
(without duplication) any portion of the Principal Distribution Amount
remaining after all distributions made pursuant to Section 4.02(a) hereof on
such Distribution Date.
"Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Group 1 Interest Remittance Amount,
Group 2 Interest Remittance Amount and Group 3 Interest Remittance Amount for
such Distribution Date exceed the aggregate amount distributed on such
Distribution Date pursuant to paragraphs (a) through (c) under Section 4.01
hereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is
payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act; (b) without giving effect to any extension granted
or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are
paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors, and
if such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the
most current list of such organizations released by the Securities and
Exchange Commission.
"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 Insurance Certificate": The certificate evidencing an FHA
Insurance Contract.
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"Mortgage Interest Rate": With respect to each 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 (i)
in the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate
set forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in
effect immediately following the Cut-off Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth
in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date,
to equal the sum, rounded to the 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.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held
as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of December 1, 2002, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date (i) with respect to the
Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed-Rate Mortgage Loans and the
Adjustable-Rate Mortgage Loans, attached hereto as Exhibit D. The Mortgage
Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged Property
or a designation that the Mortgaged Property is a multi-family property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
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(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the Arrearage of the Mortgage Loan as of the Cut-off Date;
(13) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(14) the current principal and interest payment of the Mortgage Loan as
of the Cut-off Date;
(15) the contractual interest paid to date of the Mortgage Loan;
(16) if the Mortgage Loan is not owner-financed, the Combined
Loan-to-Value Ratio at origination;
(17) a code indicating the loan performance status of the Mortgage Loan
as of the Cut-off Date;
(18) a code indicating whether the Mortgage Loan is a Simple Interest
Mortgage Loan or an Actuarial Mortgage Loan;
(19) a code indicating whether the Mortgaged Property is in bankruptcy or
in its forbearance period as of the Cut-off Date;
(20) a code indicating whether the Mortgage Loan is conventional or
insured by the FHA;
(21) a code indicating the Index that is associated with such Mortgage
Loan;
(22) the Gross Margin;
(23) the Periodic Rate Cap;
(24) the Minimum Loan Rate;
(25) the Maximum Loan Rate;
(26) a code indicating whether the Mortgage Loan has a prepayment penalty
and the type of prepayment penalty;
(27) the first Adjustment Date immediately following the Cut-off Date;
(28) the rate adjustment frequency;
(29) the payment adjustment frequency;
(30) a code indicating whether the Mortgage Loan is owner-financed;
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(31) a code indicating whether the Mortgage Loan is subject to negative
amortization; and
(32) a code indicating whether the Mortgage Loan is a second lien.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate, for the Fixed-Rate Mortgage Loans and for the Adjustable-Rate
Mortgage Loans: (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. The Mortgage Loan Schedule shall be amended from time to time by the
Seller in accordance with the provisions of this Agreement. With respect to
any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling or multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Excess Spread": With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the excess of (x) the Pool Balance as of the last day of the
related Collection Period, multiplied by 1/12th of the Weighted Average Net
Mortgage Rate over (y) the sum of Accrued Certificate Interest for the Offered
Certificates and the Class B-2 and Class B-3 Certificates for such
Distribution Date, and (ii) 12, and the denominator of which is the Pool
Balance as of the last day of the related Collection Period.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of unreimbursed Advances,
unreimbursed Servicing Advances, Servicing Fees and any other accrued and
unpaid servicing fees received and retained in connection with the liquidation
of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan and
any Collection Period, the Mortgage Interest Rate borne by such Mortgage Loan
minus the Expense Fee Rate for such Mortgage Loan and such Collection Period.
"Net Rate Cap": With respect to the Class 1-A1, Class 2-A1 and Class
3-F1 Certificates and any Distribution Date, the Group Cap for Loan Group 1,
Loan Group 2 and Loan
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Group 3, respectively, and such Distribution Date. With respect to each class
of Subordinate Certificates and any Distribution Date, the Subordinate Cap for
such Distribution Date.
"Net Rate Carryover Amount": If on any Distribution Date, the
Accrued Certificate Interest for any Offered Certificate (other than a Class
3-F1 or Class A-IO Certificate) or Class B-2 or Class B-3 Certificate is based
upon the applicable Net Rate Cap, the excess of (i) the amount of interest
such Certificate would have been entitled to receive on such Distribution Date
based on its Pass-Through Rate, over (ii) the amount of interest such
Certificate received on such Distribution Date based on the applicable Net
Rate Cap, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate on such Certificate).
"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 that, in
the good faith business judgment of the Servicer, will not or, in the case of
a proposed Advance or Servicing Advance, would not be ultimately recoverable
from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to the Class A-IO Certificates, (i)
on any Distribution Date through the Distribution Date in December 2003, an
amount equal to the sum of the Group Class A-IO Component Notional Balances
for Loan Group 1, Loan Group 2 and Loan Group 3 for such Distribution Date,
and (ii) after the December 2003 Distribution Date, zero. With respect to the
Class N Certificates, an amount equal to the Original Class N Notional Amount
reduced by the aggregate distributions made to the Class N Certificates
pursuant to Section 4.02(b)(xviii).
"Offered Certificates": The Class 1-A1, Class 2-A1, Class 3-F1,
Class A-IO, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F and Class B-1 Certificates.
"Offered P&I Certificates": The Class 1-A1, Class 2-A1, Class 3-F1,
Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F and Class B-1 Certificates.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or
the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer except
that any opinion of counsel relating to (a) the qualification of any REMIC as
a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Servicer may opt to terminate the Mortgage Pool pursuant to Section 10.01.
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"Original Class A-IO Notional Amount": The Notional Amount of the
Class A-IO Certificates on the Closing Date, as set forth opposite such Class
in the Preliminary Statement.
"Original Class N Notional Amount": $8,000,000.
"Original Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class in the Preliminary Statement,
except with respect to the Class A-IO, Class N, Class X and Residual
Certificates, which have an Original Class Certificate Principal Balance of
zero.
"Original Notional Amount": The Original Class A-IO Notional Amount
or the Original Class N Notional Amount, as the case may be.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the immediately
preceding Collection Period over (y) the aggregate Certificate Principal
Balances of all Classes of Certificates (after taking into account all
distributions of principal on such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of
all Classes of Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the excess, if any, of (i) the Overcollateralization
Amount for such Distribution Date, assuming that 100% of the Principal
Remittance Amount is applied as a principal payment on the Certificates on
such Distribution Date, over (ii) the Targeted Overcollateralization Amount
for such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class 1-A1 Pass-Through Rate, the
Class 2-A1 Pass-Through Rate, the Class 3-F1 Pass-Through Rate, the Class A-IO
Pass-Through Rate, the Class M-1 Pass-Through Rate, the Class M-2V
Pass-Through Rate, the Class M-2F Pass-Through Rate, the Class B-1
Pass-Through Rate, the Class B-2 Pass-Through Rate and the Class B-3
Pass-Through Rate. With respect to the Class N Certificates, the Pass-Through
Rate is 8.353% per annum.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
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"Percentage Interest": With respect to any Certificate (other than a
Class A-IO, Class N, Class X or Residual Certificate), a fraction, expressed
as a percentage, the numerator of which is the Initial Certificate Principal
Balance, as the case may be, represented by such Certificate and the
denominator of which is the Original Class Certificate Principal Balance of
the related Class. With respect to a Class A-IO or Class N Certificate, the
undivided percentage interest obtained by dividing the Initial Notional Amount
evidenced by such Certificate by the Original Class A-IO Notional Amount or
Original Class N Notional Amount, as the case may be, of such Class. With
respect to a Class X or 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
Interest Rate for such Mortgage Loan may increase or decrease (without regard
to the Maximum Loan Rate or the Minimum Loan Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect immediately prior to such Adjustment
Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued or managed by the Depositor, the Servicer,
the Trustee or any of their respective Affiliates or for which an Affiliate of
the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agents acting
in its commercial capacity) 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 its ultimate
parent has a short-term uninsured debt rating in one of the two highest
available rating categories of S&P and ▇▇▇▇▇'▇ and the highest available
rating category of Fitch and provided that each such investment has an
original maturity of no more than 365 days 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 A or higher by S&P and Fitch and rated A2 or higher by ▇▇▇▇▇'▇,
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 or (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
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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 each Rating
Agency in its highest long-term unsecured rating categories 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 each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 including funds managed or advised by the Trustee or
affiliates thereof having the highest rating category by the applicable
Rating Agency; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security
or investment, as may be acceptable to the Rating Agencies in writing as
a permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the
right to receive (a) only interest with respect to the obligations underlying
such instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity at par greater
than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate
other than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in full that was applied by the Servicer to
reduce the outstanding principal balance of such loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the related Prepayment
Period.
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"Prepayment Penalty Schedule": As of the Cut-off Date, a list
attached hereto as Schedule I (including the prepayment penalty summary
attached thereto), setting forth the following information with respect to
each prepayment penalty:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of prepayment penalty;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related prepayment penalty; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
The Prepayment Penalty Schedule shall be amended from time to time
by the Servicer in accordance with the provisions of this Agreement and a copy
of each related amendment shall be furnished by the Servicer to the Trustee
and the Class N and Class X Certificateholders.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Servicer pursuant to
Section 3.08.
"Principal Balance": As to any Mortgage Loan and any day, other than
a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus
all collections credited against the principal balance of any such Mortgage
Loan and the principal portion of Advances plus, Deferred Interest, if any.
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 Distribution Amount": As to any Distribution Date, the
sum of (i) the Principal Remittance Amount minus, for Distribution Dates
occurring on and after the Stepdown Date and for which a Trigger Event is not
in effect, the Overcollateralization Release Amount, if any, and (ii) the
Extra Principal Distribution Amount, if any.
"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.
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"Principal Remittance Amount": With respect to any Distribution
Date, the sum of the Group 1 Principal Remittance Amount, the Group 2
Principal Remittance Amount and the Group 3 Principal Remittance Amount.
"Private Certificates": Any of the Class B-2, Class B-3, Class N,
Class X and Residual Certificates.
"Property 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 Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Proportionate Holder": As defined in Section 9.01(n) hereof.
"Prospectus Supplement": That certain Prospectus Supplement dated
December 13, 2002 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and
as confirmed by an Officers' Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in
the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at
the applicable Mortgage Interest 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, its fair market value, determined in good faith by the Servicer,
(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 3.13, 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.
"Qualified Insurer": Any insurance company acceptable to ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac.
"Rating Agency" or "Rating Agencies": Fitch, ▇▇▇▇▇'▇ and S&P, or
their respective successors. If such agencies or their successors are no
longer in existence, "Rating Agencies" shall be such nationally recognized
statistical rating organizations as set forth on the most current list of such
organizations released by the Securities and Exchange Commission and
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal
balance of the related Mortgage Loan.
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"Record Date": With respect to all of the Floating Rate Certificates
and any Distribution Date, the Business Day immediately preceding such
Distribution Date; provided, however, that if any such Certificate becomes a
Definitive Certificate, the Record Date for such Certificate shall be the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs. With respect to the Fixed Rate Certificates and the
Class N, Class X and Residual Certificates and any Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs (or the Closing Date, in the case of the first
Distribution Date).
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or
under common control with the Depositor or the Trustee, (iii) whose quotations
appear on the Telerate Page 3750 on the relevant LIBOR Determination Date and
(iv) which have been designated as such by the Trustee after consultation with
the Servicer.
"Regular Certificate": Any of the Offered Certificates, the Class
B-2 Certificates, the Class B-3 Certificates, the Class N Certificates and the
Class X Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act, the amount
by which (i) interest collectible on such Mortgage Loan during such Collection
Period is less than (ii) one month's interest on the Principal Balance of such
Mortgage Loan at the Mortgage Interest Rate for such Mortgage Loan before
giving effect to the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 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 Interest": Any of the Master REMIC Regular Interests,
the Intermediate REMIC Regular Interests, the Subsidiary REMIC Regular
Interests, the Class B-2 Regular Interest, the Class B-3 Regular Interest, the
Class Master XN Interest, and the Class X-N Interest.
"Remittance Report": A report prepared by the Servicer and delivered
to the Trustee pursuant to Section 4.07, containing the information attached
hereto as Exhibit P.
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"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust Fund.
"REO Principal Amortization": With respect to any REO Property, for
any calendar month, the aggregate of all amounts received in respect of such
REO Property during such calendar month, whether in the form of rental income,
sale proceeds (including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property)
or otherwise, net of any portion of such amounts (i) payable pursuant to
Section 3.13 in respect of the proper operation, management and maintenance of
such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.13 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.
"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 3.13.
"Re-Performance Test": The following criteria one of which must be
met for a Mortgage Loan to qualify as a Re-Performing Mortgage Loan: (1) the
Mortgagor has made at least three aggregate Monthly Payments in the three
calendar months preceding the Cut-off Date (regardless of either the timing of
receipt of such payments or the payment history of such loans prior to
September 1, 2002), or (2) the Mortgagor has made at least four aggregate
Monthly Payments in the four calendar months preceding the Cut-off Date
(regardless of either the timing of receipt of such payments or the payment
history of such loans prior to August 1, 2002), or (3) the Mortgagor has made
at least five aggregate Monthly Payments in the five calendar months preceding
the Cut-off Date (regardless of either the timing of receipt of such payments
or the payment history of such loans prior to July 1, 2002).
"Re-Performing Mortgage Loan": A Mortgage Loan which has defaulted
in the past and which is at least 90 days Delinquent with respect to certain
Monthly Payments but which satisfies one of the Re-Performance Test criteria.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Required Basis Risk Reserve Fund Amount": With respect to any
Distribution Date on which the related Net Excess Spread is less than 0.25%,
an amount equal to the lesser of (x) $15,000 and (y) the product of (i) 0.50%
and (ii) the Pool Balance as of the last day of the related Collection Period.
With respect to any Distribution Date on which the Net Excess Spread is equal
to or greater than 0.25%, an amount equal to $5,000.
"Required Basis Risk Reserve Fund Deposit": With respect to any
Distribution Date, the excess, if any, of (i) the Required Basis Risk Reserve
Fund Amount over (ii) the amount of funds on deposit in the Basis Risk Reserve
Fund as of the close of business on the Business Day immediately preceding
such Distribution Date.
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"Residential Dwelling": Any one of the following: (i) a one-family
dwelling, (ii) a two- to four-family dwelling, (iii) a one-family dwelling
unit in a ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, (iv) a one-family dwelling
in a planned unit development, which is not a co-operative, or (v) a mobile or
manufactured home (as defined in ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 5402(6)).
"Residual Certificates": The Class R Certificates.
"Residual Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and in each case having direct responsibility for
the administration of this Agreement.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors, and if such company shall for
any reason no longer perform the functions of a securities rating agency,
"S&P" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such
organizations released by the Securities and Exchange Commission.
"Schedule": The schedule accompanying the ISDA Master Agreement.
"Seller": Credit-Based Asset Servicing and Securitization LLC, or
its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Senior Certificates": The Class 1-A1, Class 2-A1, Class 3-F1, and
Class A-IO Certificates.
"Senior Certificate": Any one of the Certificates with an "A" or an
"F" designated on the face thereof substantially in the form annexed hereto as
Exhibits ▇-▇, ▇-▇, ▇-▇ and A-4, executed by the Trustee on behalf of the Trust
and authenticated and delivered by the Certificate Registrar, representing the
right to distributions as set forth herein and therein.
"Senior Certificateholders": Collectively, the Holders of the Senior
Certificates.
"Senior Principal Distribution Amount": With respect to any
Distribution Date, the sum of the Class 1-A1 Principal Distribution Amount,
the Class 2-A1 Principal Distribution Amount and the Class 3-F1 Principal
Distribution Amount for such Distribution Date.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balances of the Subordinate Certificates and (ii) the
Overcollateralization Amount, in each case after taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
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"Senior Specified Enhancement Percentage": On any date of
determination thereof, 46.50%.
"Servicer": ▇▇▇▇▇▇ Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Servicer or which is 50% or more owned by the
Servicer and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Servicer Remittance Date": With respect to any Distribution Date,
the Business Day immediately preceding such Distribution Date.
"Servicer's Assignee": As defined in Section 3.29(b) hereof.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Servicer in the performance of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) 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.
"Servicing Fee Rate": With respect to each Mortgage Loan, 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 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 Standard": Shall mean the standards set forth in Section
3.01.
"Simple Interest Method": The method of allocating a payment to
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the
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product of the fixed rate of interest multiplied by the unpaid principal
balance multiplied by the period of time elapsed since the preceding payment
of interest was made and divided by either 360 or 365, as specified in the
related Mortgage Note, and the remainder of such payment is allocated to
principal.
"Simple Interest Mortgage Loan": Any Mortgage Loan under which the
portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
"SPV": As defined in Section 3.29(a) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the
Bankruptcy Code.
"Stepdown Date": The later to occur of (x) the earlier to occur of
(A) the Distribution Date in January 2006 and (B) the Distribution Date on
which the aggregate Certificate Principal Balance of the Senior Certificates
is reduced to zero, and (y) the first Distribution Date on which the Senior
Enhancement Percentage (after taking into account distributions of principal
on such Distribution Date) is greater than or equal to the Senior Specified
Enhancement Percentage.
"Sub WAC Alternative Rate": For any Distribution Date, a per annum
rate equal to a weighted average of each Group's Subordinated Amount. In the
case where the Sub WAC Rate is greater than the Sub WAC Alternative Rate,
payments among any Group's Class I-Sub Interests will not be made
proportionately, but instead, a portion of the payments allocated to the Class
I-Sub-1a Interest, Class I-Sub-2a Interest, and Class I-Sub-3a Interest will
be allocated to the Class I-Sub-1c Interest, Class I-Sub-2c Interest, and
Class I-Sub-3c Interest, respectively (until reduced to zero) (or
alternatively, a portion of the payments allocated to the Class I-Sub-1d
Interest, Class I-Sub-2d Interest, and Class I-Sub-3d Interest will be
allocated to the Class I-Sub-1b Interest, Class I-Sub-2b Interest, and Class
I-Sub-3b Interest, respectively, until reduced to zero).
In the case where the Sub WAC Rate is less than the Sub WAC
Alternative Rate, payments among any Group's Class I-Sub Interests will not be
made proportionately, but instead, a portion of the payments allocated to the
Class I-Sub-1c Interest, Class I-Sub-2c Interest, and Class I-Sub-3c Interest
will be allocated to the Class I-Sub-1a Interest, Class I-Sub-2a Interest, and
Class I-Sub-3a Interest, respectively (until reduced to zero) (or
alternatively, a portion of the payments allocated to the Class I-Sub-1b
Interest, Class I-Sub-2b Interest, and Class I-Sub-3b Interest will be
allocated to the Class I-Sub-1d Interest, Class I-Sub-2d Interest, and Class
I-Sub-3d Interest, respectively, until reduced to zero).
"Sub WAC Rate": A rate equal to the weighted average rate of the
Class I-Sub-1a Interest, Class I-Sub-1b Interest, Class I-Sub-2a Interest,
Class I-Sub-2b Interest, Class I-Sub-3a Interest and Class I-Sub-3b Interest.
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"Subordinate Cap": For any Distribution Date, the weighted average
of the Group Caps (each adjusted as necessary to an effective rate reflecting
the accrual of interest on an actual/360 basis, except in the case of the
Class M-2F Certificates, on a 30/360 basis) for Loan Group 1, Loan Group 2 and
Loan Group 3 and such Distribution Date (weighted on the basis of the excess
of the Group Balance of each such Loan Group as of the first day of the
related Collection Period over the Certificate Principal Balance of the Senior
Certificates related to such Loan Group on such Distribution Date (prior to
all distributions to be made on such Distribution Date)).
"Subordinate Certificates": The Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F,
Class B-1, Class B-2, Class B-3, Class N, Class X, Class R-1 and Class R-2
Certificates.
"Subsidiary REMIC Regular Interest": As defined in the Preliminary
Statement.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 1.50% of the initial Pool Balance and
(y) on and after the Stepdown Date, (A) so long as a Trigger Event is not in
effect as of such Distribution Date, the greater of (i) 0.50% of the initial
Pool Balance and (ii) 3.00% of the Pool Balance as of the last day of the
related Collection Period, or (B) if a Trigger Event is in effect as of such
Distribution Date, the Targeted Overcollateralization Amount as of the
immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns 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 on behalf of the Trust for each of the eight REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and
all other information reports or returns that may be required to be furnished
to the Certificateholders or filed with the Internal Revenue Service or any
other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i) the
six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 49.00%
of the Senior Enhancement Percentage; provided, that if the Certificate
Principal Balance of the Senior Certificates has been reduced to zero, a
Trigger Event will have occurred if the six-month rolling average of 60+ Day
Delinquent Loans equals or exceeds 20% or (ii) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Collection
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Period divided by the initial Pool Balance exceeds the applicable percentages
set forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
January 2006 through December 2006 3.00%
January 2007 through December 2007 3.75%
January 2008 through December 2008 4.75%
January 2009 and thereafter 5.50%
"Trust": 2002-CB6 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered
hereunder, with respect to a portion of which five REMIC elections are to be
made, such entire Trust Fund consisting of: (i) such Mortgage Loans as from
time to time are subject to this Agreement, together with the Mortgage Files
relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property, together with all collections thereon and
proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies required to be maintained pursuant to this
Agreement and any proceeds thereof, (iv) the Depositor's rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) the Collection Account, the Distribution Account, the Basis Risk
Reserve Fund, the Interest Rate Cap Account and any REO Account and such
assets that are deposited therein from time to time and any investments
thereof, together with any and all income, proceeds and payments with respect
thereto, and (vi) the Interest Rate Cap Agreements. Notwithstanding the
foregoing, however, the Trust Fund specifically excludes all payments and
other collections of principal and interest representing Arrearage.
"Trustee": JPMorgan Chase Bank, a New York banking corporation, or
any successor Trustee appointed as herein provided.
"Trustee Fee": With respect to any Distribution Date, the product of
(x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal
Balances of all Mortgage Loans as of the opening of business on the first day
of the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date, 0.0090%
per annum.
"Underwriters": Greenwich Capital Markets, Inc. and Residential
Funding Securities Corporation, as underwriters with respect to the Offered
Certificates.
"United States Person" or "U.S. Person": (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated
as a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or
the District of Columbia (unless, in the case of a partnership, Treasury
regulations provide otherwise) or (iii) an estate the income of which is
includible in gross income for United States tax purposes, regardless of its
source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust.
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Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain Trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be a U.S. Person.
"Unpaid Realized Loss Amount": With respect to each Class of
Subordinate Certificates and any Distribution Date, the excess of (x) the
cumulative amount of Applied Realized Loss Amounts allocated to such class
pursuant to Section 4.03 for all Distribution Dates over (y) the cumulative
amount of payments in respect of Unpaid Realized Loss Amounts to such Class
for all prior Distribution Dates pursuant to Section 4.02(b).
"Value": With respect to any Mortgaged Property, the value thereof
as determined by an independent appraisal made at the time of the origination
of the related Mortgage Loan or the sale price, if the appraisal is not
available; except that, with respect to any Mortgage Loan that is a purchase
money mortgage loan, the lesser of (i) the value thereof as determined by an
independent appraisal made at the time of the origination of such Mortgage
Loan, if any, and (ii) the sales price of the related Mortgaged Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights
allocated among Holders of the Offered Certificates (other than the Class A-IO
Certificates) and the Class B-2 and Class B-3 Certificates shall be 97% for so
long as the Class A-IO Certificates are outstanding and 98% thereafter. Such
Voting Rights shall be allocated among each such Class according to the
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of all the Certificates of such Class then
outstanding and the denominator of which is the aggregate Certificate
Principal Balance of all of the Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among
all Holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any
Certificate registered in the name of the Servicer, the Depositor, the Trustee
or any of their respective affiliates shall not be included in the calculation
of Voting Rights; provided that only such Certificates as are known by a
Responsible Officer of the Trustee to be so registered will be so excluded.
For so long as the Class A-IO Certificates are outstanding, the percentage of
the Voting Rights allocated among Holders of such Certificates will be 1%. The
percentage of all the Voting Rights allocated among the Holders of the Class N
and Class X Certificates shall be 2%. The Residual Certificates shall have no
Voting Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based on
Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-Off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, expressed as an annual rate and
calculated on the basis of twelve months consisting of 30 days each and a
360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
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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.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, 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 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) all proceeds of any of the foregoing; (v) the rights of
the Depositor under the Mortgage Loan Purchase Agreement, and (vi) all other
assets included or to be included in the Trust Fund; provided, however, so
long as the Servicer is an FHA Approved Mortgagee, the Commissioner of HUD
shall have no obligation to recognize or deal with any person other than the
Servicer with respect to FHA Insurance. Such assignment includes all interest
and principal due to the Depositor or the Servicer after the Cut-off Date with
respect to the Mortgage Loans.
In connection with such transfer and assignment, the Seller, on
behalf of the Depositor, does hereby deliver or cause to be delivered to, and
deposit with the Trustee, or its designated agent (the "Custodian"), the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of JPMorgan Chase Bank, as
Trustee under the Pooling and Servicing Agreement, dated as of
December 1, 2002, among Credit-Based Asset Servicing and
Securitization LLC, Financial Asset Securities Corp., ▇▇▇▇▇▇ Loan
Servicing LP and JPMorgan Chase Bank, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6, without recourse," or
with respect to any lost Mortgage Note, an original Lost Note
Affidavit, together with a copy of the related Mortgage Note;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of
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attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been
lost or is not otherwise available, a copy of such Mortgage or
power of attorney, as the case may be, certified to be a true and
complete copy of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either
(A) in blank or (B) to "JPMorgan Chase Bank, as Trustee under the
Pooling and Servicing Agreement, dated as of December 1, 2002,
among Credit-Based Asset Servicing and Securitization LLC,
Financial Asset Securities Corp., ▇▇▇▇▇▇ Loan Servicing LP and
JPMorgan Chase Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2002-CB6, without recourse";
(iv) an original, or a certifed copy thereof, of any intervening
assignment of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy;
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vii) for each FHA Loan, the original Mortgage Insurance Certificate.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
The Servicer shall within 90 days following the Closing Date, with
respect to each Mortgage Loan that is subject to the provisions of the
Homeownership and Equity Protection Act of 1994 place a legend on the original
Mortgage Note indicating (1) the satisfaction of the provisions of such Act
and the regulations issued thereunder, and (2) that the Mortgage Loan is
subject to special truth in lending rules.
The Servicer shall promptly (and in no event later than thirty days
following the Closing Date) submit or cause to be submitted for recording, at
the Servicer's expense and at no expense to the Trust Fund or the Trustee, in
the appropriate public office for real property records, each Assignment
referred to in Sections 2.01(iii) and (iv) above. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared a substitute Assignment
or cure or cause to be cured such defect, as the case may be, and thereafter
cause each such Assignment to be duly recorded.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y)
has been lost or such public recording office has retained the original of
such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or
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the applicable public recording office in the case of (y) above to be a true
and complete copy of the original that was submitted for recording and (2) if
such copy is certified by the Seller, delivery to the 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. The Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect
to any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing
Date, in the case of missing Mortgages or Assignments or deliver such missing
document to the Trustee or the Custodian. If the Seller does not cure such
defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Mortgage Loan in accordance
with Section 2.03.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Seller shall cause to be
completed such endorsements "Pay to the order of JPMorgan Chase Bank, as
Trustee under the Pooling and Servicing Agreement, dated as of December 1,
2002, among Credit-Based Asset Servicing and Securitization LLC, Financial
Asset Securities Corp., ▇▇▇▇▇▇ Loan Servicing LP and JPMorgan Chase Bank,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6, without
recourse."
The Depositor herewith delivers to the Trustee executed copies of
the Mortgage Loan Purchase Agreement.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt of, 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
documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage
File, and that it holds or will hold all such assets and such other assets
included in the definition of "Trust Fund" in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any document delivered after the
Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to
certify in substantially the form attached hereto as Exhibit F-1 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 relate to such Mortgage
Loan and (iii) based on its
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examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1), (2), (3), (5), (13) and
(26) (in the case of (26), only as to whether there is a prepayment penalty)
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, enforceable, 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
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trustee shall so notify
the Seller, the Depositor and the Servicer. In addition, upon the discovery by
the Seller, 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 Seller in the related Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens
and encumbrances, from the Depositor to the Trustee 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, on behalf of the Trust, a first priority perfected security interest
in all of the Depositor's right, title and interest in and to the Mortgage
Loans 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
Seller.
(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 Seller of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in Section 2.04 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 (or the
Custodian, as applicable) shall promptly notify the Seller and the Servicer of
such defect, missing document or breach and request that the Seller deliver
such missing document or cure such defect or breach within 120 days or 150
days following the Closing Date, in the case of missing Mortgages or
Assignments from the date the Seller was notified of such missing
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document, defect or breach, and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Trustee, shall enforce the Seller's obligation under the Mortgage
Loan Purchase Agreement and cause the Seller 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 120 day period (subject to Section
2.03(e)); provided that, in connection with any such breach that could not
reasonably have been cured within such 120 day or 150 day period, if the
Seller shall have commenced to cure such breach within such 120 day or 150 day
period, the Seller shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written certification from the Servicer of such deposit, shall
release to the Seller the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
the Seller shall furnish to it and as shall be necessary to vest in the Seller
any Mortgage Loan released pursuant hereto and the Trustee shall have no
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, the Seller may cause
such Mortgage Loan to be removed from the Trust Fund (in which case it shall
become a Defective Mortgage Loan) and substitute one or more Eligible
Substitute Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.03(d). It is understood and agreed that the obligation of
the Seller to cure or to repurchase (or to substitute for) any Mortgage Loan
as to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy against the Seller respecting such omission, defect
or breach available to the Trustee, on behalf of the Certificateholders.
(b) A Mortgage Loan that has an Arrearage cannot be substituted for
a Mortgage Loan that does not have an Arrearage.
(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 Eligible Substitute Mortgage Loans for
Defective 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 Defective Mortgage Loan for which the Seller substitutes a
Eligible Substitute Mortgage Loan or Loans, such substitution shall be
effected by the Seller delivering to the Trustee, for such Eligible Substitute
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Eligible Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. The Trustee shall acknowledge receipt for such Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days thereafter,
shall review such documents as specified in Section 2.02 and deliver (or cause
the Custodian to deliver) to the Servicer, with respect to such Eligible
Substitute Mortgage Loan or Loans, a certification substantially in the form
attached hereto as Exhibit F-1, with any
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applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver (or cause the Custodian to deliver) to
the Servicer a certification substantially in the form of Exhibit F-2 hereto
with respect to such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the month of substitution are not part
of the Trust Fund and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will reflect the collections
and recoveries in respect of such Defective Mortgage Loan in the Collection
Period preceding the month of substitution and the Depositor or the Seller, as
the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Defective Mortgage Loan. The Seller
shall give or cause to be given written notice to the Certificateholders that
such substitution has taken place, shall amend the Mortgage Loan Schedule to
reflect the removal of such Defective Mortgage Loan from the terms of this
Agreement and the substitution of the Eligible Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, such Eligible 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, in the case of a substitution
effected by the Seller, the Mortgage Loan Purchase Agreement, including, in
the case of a substitution effected by the Seller all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement and all applicable representations and warranties thereof set forth
in Section 2.04, in each case as of the date of substitution.
For any month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage
Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage
Loan, of the principal balance thereof as of the date of substitution,
together with one month's interest on such principal balance at the applicable
Net Mortgage Interest Rate. On the date of such substitution, the Seller will
deliver or cause to be delivered to the Servicer for deposit in the Collection
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or
Loans and certification by the Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall deliver to it and as shall be necessary to vest therein any
Defective Mortgage Loan released pursuant hereto.
In addition, the Seller 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)(l) of the Code or on "contributions after the startup date"
under Section 860G(d)(l) 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 Seller, 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
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to the other parties. In connection therewith, the Seller shall repurchase or,
subject to the limitations set forth in Section 2.03(d), substitute one or
more Eligible 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. In addition, upon discovery that a Mortgage Loan
is defective in a manner that would cause it to be a "defective obligation"
within the meaning of Treasury regulations relating to REMICs, the Seller
shall cure the defect or make the required purchase or substitution no later
than 90 days after the earlier of the discovery of the defect and receipt of
notification of the defect. Any such repurchase or substitution shall be made
in the same manner as set forth in Section 2.03(a), if made by the Seller. The
Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee, with respect to
the custody, acceptance, inspection and release of the Mortgage Files pursuant
to Sections 2.01, 2.02 and 2.03 and preparation and delivery of the
certifications in the form of Exhibit F-1 and Exhibit F-2 shall be performed
by the Custodian pursuant to the terms and conditions of the Custodial
Agreement. The fees and expenses of the Custodian shall be paid by the
Servicer.
Section 2.04 Representations and Warranties of the Seller with
Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date or as of such
other date specifically provided herein:
(a) The representations and warranties made by the Seller pursuant
to Section 3.01 of the Mortgage Loan Purchase Agreement are hereby being made
to the Trustee and are true and correct as of the Closing Date.
(b) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved the application of the Seller's underwriting
standards or some assessment of the Mortgagor's ability to repay the Modified
Mortgage Loan.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Seller's knowledge or as to
which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Servicer or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan or the interest therein of the
Certificateholders then, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate
at the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
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Upon discovery by the Depositor, the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties contained in
this Section that materially and adversely affects the value of any Mortgage
Loan or the interest therein of the Certificateholders, the party discovering
the breach shall give prompt written notice to the others and in no event
later than two Business Days from the date of such discovery. Within ninety
days of its discovery or its receipt of notice of any such missing or
materially defective documentation or any such breach of a representation or
warranty, the Seller shall promptly deliver such missing document or cure such
defect or breach in all material respects, or in the event such defect or
breach cannot be cured, the Seller shall repurchase the affected Mortgage Loan
or cause the removal of such Mortgage Loan from the Trust Fund and substitute
for it one or more Eligible Substitute Mortgage Loans, in either case, in
accordance with Section 2.03.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the Mortgage Files to
the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. It is
understood and agreed that the obligations of the Seller set forth in this
Section 2.04 to cure, substitute for or repurchase a Mortgage Loan pursuant to
Section 2.03(a) and the Mortgage Loan Purchase Agreement constitute the sole
remedies available to the Certificateholders or to the Trustee on their behalf
respecting a breach of the representations and warranties contained in this
Section 2.04.
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 duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry on its business as now being conducted,
except for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse
effect on the ability of the Servicer to conduct its business as it is
presently conducted, and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business of
the type conducted by the Servicer or to ensure the enforceability or
validity of each Mortgage Loan; the Servicer has the power and authority
to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally; and all requisite corporate action has been taken by the
Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;
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(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the certificate of
formation or the partnership agreement of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Servicer or its property is subject, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject;
(iii) The Servicer is an approved seller/servicer of conventional
mortgage loans for ▇▇▇▇▇▇ ▇▇▇, is an FHA Approved Mortgagee in good
standing to service mortgages, and has not been suspended as a mortgagee
or servicer by the FHA and has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans. The Servicer is, and shall remain for as long
as it is servicing the Mortgage Loans hereunder, in good standing as a
FHA Approved Mortgagee and to service mortgage loans for HUD, ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to
comply with HUD, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or FHA eligibility requirements
or which would require notification to any of HUD, ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇
Mac or FHA;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and
will constitute valid, legal and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy laws and
general principles of equity;
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval 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 of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders, if any, that
have been obtained;
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(viii) 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
or omits or will omit to state a material fact necessary in order to make
the statements contained therein, in light of the circumstances under
which they were made, not misleading; and
(ix) With respect to each of the Group 1 Mortgage Loans and the
Group 3 Mortgage Loans, 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 (three of
the credit repositories), on a monthly basis.
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, the Seller 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 or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and marketable title to each Mortgage Loan (insofar as
such title was conveyed to it by the Seller) subject to no prior lien,
claim, participation interest, mortgage, security interest, pledge,
charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title 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;
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(v) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State 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 certificate of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in
any violation of the provisions of the articles of incorporation or
by-laws of the Depositor or, to the best of the Depositor's knowledge
without independent investigation, any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as would
not have a material adverse effect on the ability of the Depositor to
perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for
the issuance of the Certificates, or the consummation by the Depositor of
the other transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
(a) may be required under State securities or Blue Sky laws, (b) have
been previously obtained or (c) the failure of which to obtain would not
have a material adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement;
and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation
by the Depositor of any of the transactions contemplated by this
Agreement, as the case may be; (d) which might materially and
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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 (or the Custodian, as bailee and Custodian of the
Trustee) of the Mortgage Files, subject to the provisions of Sections 2.01 and
2.02, and the Trustee acknowledges 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 Order to Authenticate executed by an officer
of the Depositor, has executed, and the Certificate Registrar has
authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class X and Residual Certificates) in minimum
dollar denominations or $25,000 and integral dollar multiples of $1 in excess.
The Class X Certificates and the Residual Certificates are issuable only in
minimum Percentage Interests of 10%. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.
Section 2.08 Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders that as of the Closing Date or as
of such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which
the failure to so qualify would have a material adverse effect on (a) its
business, properties, assets or condition (financial or other), (b) the
performance of its obligations under this Agreement, (c) the value or
marketability of the Mortgage Loans, or (d) its ability to foreclose on
the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the Seller's
legal, valid and binding obligations enforceable in accordance with its
terms, except as enforcement of such terms may be limited by (1)
bankruptcy, insolvency, reorganization, receivership, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies, (2) general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) or (3) public policy considerations underlying the
securities laws, to the extent that such policy considerations limit the
enforceability of the provisions of this Agreement which purport to
provide indemnification from securities laws liabilities.
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(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is presently conducted, except for such licenses,
certificates and permits the absence of which, individually or in the
aggregate, would not have a material adverse effect on the ability of the
Seller to conduct its business as it is presently conducted. It is not
required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or constitute
a default under, any provision of any existing law or regulation or any
order or decree of any court applicable to the Seller or any of its
properties or any provision of its Limited Liability Company Agreement,
or constitute a material breach of, or result in the creation or
imposition of any lien, charge or encumbrance upon any of its properties
pursuant to any mortgage, indenture, contract or other agreement to which
it is a party or by which it may be bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, nor is
the Seller aware of any pending insolvency.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect
to any order or decree of any court, or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction,
which violation would materially and adversely affect the Seller's
condition (financial or otherwise) or operations or any of the Seller's
properties, or materially and adversely affect the performance of any of
its duties hereunder.
(ix) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any
court, administrative agency or other tribunal (i) that, if determined
adversely, would prohibit the Seller from entering into this Agreement,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) that, if determined adversely,
would prohibit or materially and adversely affect the Seller's
performance of any of its respective obligations under, or the validity
or enforceability of, this Agreement.
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(x) The Seller did not transfer the Mortgage Loans to the Depositor
with any intent to hinder, delay or defraud any of its creditors.
(xi) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller to the Depositor are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 2.09 Covenants of the Seller.
(a) The Seller hereby covenants that except for the transfer to the
Depositor, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any lien on any
Mortgage Loan, or any interest therein; the Seller will notify the Trustee, as
assignee of the Depositor, of the existence of any lien on any Mortgage Loan
immediately upon discovery thereof, and the Seller will defend the right,
title and interest of the Trust, as assignee of the Depositor, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Seller; provided, however that nothing in this Section 2.09 shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any
of the Mortgage Loans any liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the
time be due and payable or if the Seller shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
(b) The Seller hereby covenants that neither it nor any Affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller
nor any Affiliate of the Seller shall be deemed to directly solicit any
Mortgagor if the Seller responds to a request from a Mortgagor regarding a
refinancing or if the Mortgagor receives marketing materials which are
generally disseminated.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage servicers, 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 Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement including, in the case of FHA Loans, taking all actions that a
mortgagee is permitted or required to take by the FHA (the "Servicing
Standards").
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with
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any such term or in any manner grant indulgence to any Mortgagor if in the
Servicer's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the
Certificateholders; provided, however that the Servicer shall not make future
advances and (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) the Servicer shall not permit any modification with respect to
any Mortgage Loan that would (i) change the Mortgage Interest Rate, defer or
forgive the payment thereof of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or
extend the final maturity date with respect to such Mortgage Loan, (ii) in the
case of FHA Loans, affect the FHA Insurance Contract with respect to any such
Mortgage Loan, (iii) affect adversely the status of any REMIC as a REMIC or
(iv) cause any REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions. Notwithstanding the
foregoing, the Servicer shall not permit any modification with respect to any
Mortgage Loan that would both (x) effect an exchange or reissuance of such
Mortgage Loan under Section 1.860G-2(b) of the Treasury Regulations and (y)
cause any REMIC constituting part of the Trust Fund to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the Startup Day under the REMIC Provisions. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered to execute and deliver on behalf of itself,
and the Trustee, 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. The
Servicer shall make all required Servicing Advances and shall service and
administer the Mortgage Loans in accordance with Applicable Regulations, and
shall provide to the Mortgagor any reports required to be provided to them
thereby. If reasonably required by the Servicer, the Trustee shall furnish the
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering FHA Loans, the Servicer shall comply
strictly with the National Housing Act and the FHA Regulations and
administrative guidelines issued thereunder or pursuant thereto (insofar as
the same apply to any Mortgage Loan) and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and
under each Mortgage including the timely giving of notices, the essence hereof
being that the full benefits of each FHA Insurance Contract inure to the
Trustee, on behalf of the Certificateholders.
In servicing and administering the Mortgage Loans, the Servicer
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, the FHA
Insurance Contracts, where applicable, and the Certificateholders' reliance on
the Servicer.
The Servicer shall give prompt notice to the Trustee of any action,
of which the Servicer has actual knowledge, that purports to (i) assert a
claim against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.
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Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any prepayment penalty or portion thereof required by the terms of
the related Mortgage Note unless (i) the Servicer determines that such waiver
would maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such prepayment penalty, or (ii) (A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. In the event of a Principal Prepayment in full with respect to
any Mortgage Loan, the Servicer shall deliver to the Trustee an Officer's
Certificate substantially in the form of Exhibit Q no later than the third
Business Day following the immediately succeeding Determination Date with a
copy to the Class X Certificateholder. If the Servicer has waived or does not
collect all or a portion of a prepayment penalty relating to a Principal
Prepayment in full due to any action or omission of the Servicer, other than
as provided above, the Servicer shall, within 90 days of the date on which the
Principal Prepayment in full is remitted to the Trustee, deliver to the
Trustee the amount of such prepayment penalty (or such portion thereof as had
been waived for deposit) into the Distribution Account for distribution in
accordance with the terms of this Agreement.
The Trustee shall prepare and deliver to the Depositor and the owner
of the Class N and Class X Certificates, on a monthly basis, a statement
setting forth the amounts due and received with respect to prepayment
penalties.
The Servicer represents and warrants to the Depositor and the
Trustee, as of the Closing Date, that the information in the Prepayment
Penalty Schedule (including the attached prepayment penalty summary) is
complete and accurate in all material respects at the dates as of which the
information is furnished and each prepayment penalty is permissible and
enforceable in accordance with its terms under applicable state law, except as
the enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
Upon discovery by the Seller, the Servicer or a Responsible Officer
of the Trustee of a breach of the immediately preceding paragraph that
materially and adversely affects the rights of the Holders of the Class N and
Class X Certificates to any prepayment penalty, the party discovering the
breach shall give prompt written notice to the other parties. Within 60 days
of the earlier of discovery by the Servicer or receipt of notice by the
Servicer of breach, the Servicer shall cure the breach in all material
respects or shall pay into the Collection Account the amount of the scheduled
prepayment penalty, less any amount previously collected and paid by the
Servicer into the Collection Account. If the covenant made by the Servicer in
the immediately preceding paragraph is breached, the Servicer must pay into
the Collection Account the amount of the waived prepayment penalty.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans are paid in full, the Servicer will diligently 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 and the terms and provisions of any related Primary Insurance
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Policy and Applicable Regulations, 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 Servicer will take special care in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums, and
all other charges that, as provided in the Mortgage, will become due and
payable to that end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Conventional 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
Servicer shall take such action as it shall deem to be in the best interest of
the Certificateholders. In the event that any payment due under any FHA Loan
becomes delinquent, the Servicer shall take all such actions as are in the
best interests of the Certificateholders and permitted under any applicable
FHA loss mitigation proceedings, including, but not limited to, requesting the
FHA to accept an assignment of such FHA Loan, and, upon the Servicer's
determination that foreclosure is in the best interest of the
Certificateholders, commencing foreclosure proceedings. With respect to any
defaulted Mortgage Loan, the Servicer shall have the right to review the
status of the related forbearance plan and, subject to the second paragraph of
Section 3.01, may modify such forbearance plan; including, extending the
Mortgage Loan repayment date for a period of one year or reducing the Loan
Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs
and consistent with Applicable Regulations and the servicing standards set
forth in the ▇▇▇▇▇▇ ▇▇▇ Guide, including, without limitation, advancing funds
for the payment of taxes and insurance premiums with respect to first lien
Mortgage Loans.
Notwithstanding the foregoing provisions of this Section 3.03, 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 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 Trust Fund 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 prudent report prepared by a Person who
regularly conducts environmental audits using customary industry standards,
that:
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A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest
of the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. 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 Certificateholders to take
such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(ii).
If the Servicer determines, as described above, that it is in the
best economic interest of the Certificateholders 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 Certificateholders. The cost of any such
compliance, containment, cleanup 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 3.05(ii).
Section 3.04 Collection Account and Distribution Account.
(a) The Servicer 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
Collection Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily
basis within two Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all proceeds from a Cash Liquidation;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, 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
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Mortgagor in accordance with the Servicer'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 Servicer's
normal servicing procedures, the loan documents or applicable law; and
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). The foregoing requirements for
deposit from the Collection 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, prepayment charges that are not prepayment
penalties, and assumption fees need not be deposited by the Servicer in the
Collection Account.
(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 Certificateholders. On behalf
of the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by the close of
business New York time 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 deposited to the Distribution Account from a
different source as provided herein) then on deposit in the Collection
Account.
(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 3.25. The Servicer shall give notice to the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trustee shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and
prior to any change thereof.
(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 the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
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(iii) any prepayment penalties and premiums or amounts in connection
with the waiver of such prepayment penalties or premiums, in each case
required to be deposited pursuant to Section 3.01;
(iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 3.04, 3.15, 3.16, 3.23 or 4.07; and
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own
funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall notify the Servicer of such receipt and deposit such
funds in the Distribution Account, subject to withdrawal thereof as permitted
hereunder. In addition, the Trustee shall deposit in the Distribution Account
any amounts required to be deposited pursuant to Section 3.25(b) in connection
with losses realized on Permitted Investments with respect to funds held in
the Distribution Account.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Sections 3.04(b) and
3.04(d);
(ii) to reimburse itself for Advances and Servicing Advances; the
Servicer's right to reimburse itself pursuant to this subclause (ii)
being limited to amounts received on the related Mortgage Loan which
represent payments of (a) principal and/or interest respecting which any
such Advance was made or (b) Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds respecting which any such Servicing Advance was
made;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed Advances to the extent that
such amounts are deemed to be Nonrecoverable Advances, and to reimburse
itself for such amounts to the extent that such amounts are
nonrecoverable from the disposition of REO Property pursuant to Section
3.03 or Section 3.13 hereof;
(iv) to reimburse itself for any amounts paid pursuant to Section
3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b)
the Servicing Fee from that portion of any payment or recovery as to
interest to a particular Mortgage Loan to the extent not retained
pursuant to Section 3.04(ii);
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(vi) to pay or reimburse itself for any amounts payable or paid
pursuant to Section 6.03 (and not otherwise previously reimbursed); and
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement.
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.
Section 3.06 Establishment of Escrow Account; Deposits in Escrow
Account.
The Servicer 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. A copy of such letter agreement shall be furnished
to the Trustee upon request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account on a daily basis
within two Business Days of receipt, 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 Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer 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 the related Mortgage Loan or
Applicable Regulations, the Servicer 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.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i)
to effect timely payments of ground rents, taxes, assessments, water rates,
fire, flood and hazard insurance premiums, Primary Insurance Policy premiums,
if applicable, and comparable items, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer with respect to a related Mortgage Loan
but only from amounts received on the related Mortgage Loan which represent
late payments or Late 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 Collection 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 Servicer, or to the Mortgagor to the extent
required by the related Mortgage Loan or Applicable Regulations, any interest
paid on the funds deposited in the Escrow Account, (vii) to clear and
terminate the Escrow Account on the termination of this Agreement, (viii) to
transfer to the Collection Account any insurance proceeds, or (ix) in the case
of FHA Loans, for transfer to the Collection Account, fire and
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hazard insurance proceeds and Escrow Payments with respect to any Mortgage
Loan where the FHA has directed application of such funds as a credit against
the proceeds of the FHA Insurance Contract. As part of its servicing duties,
the Servicer shall pay to the Mortgagor interest on funds in the Escrow
Account, to the extent required by the related Mortgage Loan or Applicable
Regulations, and to the extent that interest earned on funds in the Escrow
Account is insufficient, shall pay such interest from its own funds, without
any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each first lien Mortgage Loan, the Servicer 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 Primary Insurance Policy premiums and
fire, flood and hazard insurance coverage and shall obtain, from time to time,
all bills for the payment of such charges (including 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 Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage or
Applicable Regulations. To the extent that a Mortgage does not provide for
Escrow Payments, (i) the Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that 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 and (ii) ensure that all insurance required to be
maintained on the Mortgaged Property pursuant to this Agreement is maintained.
If any such payment has not been made and the Servicer receives notice of a
tax lien with respect to the Mortgage Loan 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. The Servicer assumes full responsibility for the payment
of all such bills and shall effect payments of all such bills irrespective of
the Mortgagor's faithful performance in the payment of same or the making of
the Escrow Payments and shall make Servicing Advances from its own funds to
effect such payments.
The Servicer, on behalf of the Trustee, as mortgagee, will maintain
in full force and effect (to the extent a Mortgage Loan has a Primary
Insurance Policy) a Primary Insurance Policy issued by a Qualified Insurer
with respect to each Mortgage Loan for which such coverage is required. Such
coverage will be maintained until the Combined Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 80% or less. The Servicer will not cancel
or refuse to renew any Primary Insurance Policy in effect on the Closing Date
that is required to be kept in force under this Agreement unless a replacement
Primary Insurance Policy for such cancelled or non-renewed policy is obtained
from and maintained with a Qualified Insurer. The Servicer shall not take any
action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Servicer, would
have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be
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entered into pursuant to Section 3.14, the Servicer shall promptly notify the
insurer under the related Primary Insurance Policy, if any, of such assumption
or substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under the Primary Insurance Policy. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, the Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Trustee, claims to the
insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.05.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account or the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee and the Depositor, a
certification or letter agreement, as the case may be, as required pursuant to
Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each first lien
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, (ii) the Principal Balance of the Mortgage Loan, in
each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the
amount required under applicable HUD/FHA regulations. If the Mortgaged
Property is in an area identified in the Federal Register by the Flood
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 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 least of (i) the
Principal Balance of the Mortgage Loan, (ii) the maximum insurable value of
the improvements securing such Mortgage Loan or (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended. The Servicer shall also maintain on the REO Property for the
benefit of the Certificateholders, (x) fire and hazard insurance with extended
coverage in an amount which is at least equal to the replacement cost of the
improvements which are a part of such property, (y) public liability insurance
and, (z) to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Any amounts collected by the Servicer 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 Servicer's normal servicing
procedures, shall be deposited in the Collection
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Account, subject to withdrawal pursuant to Section 3.05. It is understood and
agreed that no earthquake or other additional insurance is required to be
maintained by the Servicer or the Mortgagor or maintained on property acquired
in respect of the Mortgage Loan, other than pursuant to such Applicable
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 Servicer 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 Servicer. The Servicer shall
not interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a general policy rating of B: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.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that has a general policy rating of B:VI or better
in Best's Key Rating Guide insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.10 and otherwise complies
with all other requirements of Section 3.10, it shall conclusively be deemed
to have satisfied its obligations as set forth in Section 3.10, 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 Section 3.10, and there shall have been a loss which would have
been covered by such policy, deliver to the Trustee for deposit in the
Distribution Account the amount not otherwise payable under the blanket policy
because of such deductible clause, which amount shall not be reimbursable to
the Servicer from the Trust Fund. In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of the Trustee, claims under any such blanket policy in a timely
fashion in accordance with the terms of such policy. Upon request of the
Trustee, the Servicer shall cause to be delivered to the Trustee 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 Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies 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
Servicer 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 Servicer 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
Section 3.12 requiring the
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Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer 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 the corresponding amounts required by ▇▇▇▇▇▇ ▇▇▇ in the ▇▇▇▇▇▇ Mae
MBS Selling and Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇ Mac
Servicer's Guide. Upon request of the Trustee, the Servicer shall cause to be
delivered to the Trustee a certified true copy of the Fidelity Bond and errors
and omissions insurance policy and a statement from the surety and the insurer
that such Fidelity Bond and errors and omissions insurance policy shall in no
event be terminated or materially modified without thirty days' prior written
notice to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Servicer) in the name of the Trustee, on behalf of the
Certificateholders, or in the event the Trustee 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 Servicer 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 Trustee shall acknowledge in writing that
such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end
of the third calendar year beginning after the year of its acquisition by the
Trust Fund for purposes of Section 860G(a)(8) of the Code or, at the expense
of the Trust Fund, request from the Internal Revenue Service, more than 60
days before the day on which the above-mentioned grace period would otherwise
expire, an extension of the above-mentioned grace period, unless the Servicer
obtains an Opinion of Counsel, addressed to the Servicer and the Trustee, to
the effect that the holding by the Trust Fund of such REO Property subsequent
to such period will not: (i) result in the imposition of any tax on
"prohibited transactions" as defined in Section 860F of the Code; or (ii)
cause any REMIC constituting any part of the Trust Fund to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such REO Property (subject to any conditions
contained in such Opinion of Counsel). The Servicer shall be entitled to be
reimbursed from the Collection Account for any costs incurred in obtaining
such Opinion of Counsel, as provided in Section 3.05.
Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would: (i) cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code; or (ii) subject any REMIC
constituting part of the Trust Fund to the imposition of any federal income
taxes on the income earned from such REO Property, including
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any taxes imposed by reason of Sections 860F or 860G(c) of the Code, unless
the Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund 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 the related REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer 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 Servicer shall make or cause to be made a written report of
each such inspection. Such reports shall be retained in the Mortgage Servicing
File and copies thereof shall be forwarded by the Servicer to the Trustee upon
request. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within two Business Days of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the related REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 3.10 hereof and the fees of any managing agent
acting on behalf of the Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance 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 Trustee shall
reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Certificateholders. If as of the date title to any REO
Property was acquired by the Servicer there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Servicer, 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 Servicer as provided above, shall be deposited in the
Collection Account for distribution on the succeeding Servicer Remittance Date
in accordance with Section 4.01.
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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 and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; provided, however, that the Servicer
shall not exercise any such right if the "due-on-sale" clause, in the
reasonable belief of the Servicer, is not enforceable under applicable law. An
Opinion of Counsel at the expense of the Servicer (which expense shall
constitute a Servicing Advance) delivered to the Trustee and the Depositor to
the foregoing effect shall conclusively establish the reasonableness of such
belief. In such event, the Servicer shall make reasonable efforts to enter
into an assumption and modification agreement with the Person to whom such
property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Mortgage Note and, unless prohibited by applicable
law or the Mortgage, the Mortgagor remains liable thereon. If the foregoing is
not permitted under applicable law, the Servicer is 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 Mortgagor and becomes liable under the Note. The Mortgage Loan, as assumed,
shall conform in all respects to the requirements, representations and
warranties of this Agreement. The Servicer shall notify the Trustee that any
such assumption or substitution agreement has been completed by forwarding to
the Trustee (or the Custodian, as the case may be) the original copy of such
assumption or substitution agreement (indicating the Mortgage File to which it
relates) which copy shall be added by the Trustee (or the Custodian, as the
case may be) to the related Mortgage File and which shall, for all purposes,
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. The Servicer shall be
responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment on the related Mortgage Loan shall not be changed but shall remain as
in effect immediately prior to the assumption or substitution, the stated
maturity or outstanding principal amount of such Mortgage Loan shall not be
changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the Servicer for consenting to any
such conveyance or entering into an assumption or substitution agreement shall
be retained by or paid to the Servicer as additional servicing compensation.
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 any assumption which the Servicer
may be restricted by law from preventing, for any reason whatsoever.
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Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage Interest
Rate adjustments for each Adjustable-Rate Mortgage Rate Loan in compliance
with the requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Servicer shall execute and deliver the notices required by
each Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage
Interest Rate adjustments. The Servicer also shall provide timely notification
to the Trustee of all applicable data and information regarding such Mortgage
Interest Rate adjustments and the Servicer's methods of implementing such
Mortgage Interest Rate adjustments. Upon the discovery by the Servicer or the
Trustee that the Servicer has failed to adjust or has incorrectly adjusted a
Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the
related Mortgage Note and Mortgage, the Servicer shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
interest loss caused thereby without reimbursement therefor; provided,
however, the Servicer shall be held harmless with respect to any Mortgage
Interest Rate adjustments made by any servicer prior to the Servicer.
Section 3.16 Optional Purchases of Mortgage Loans by Servicer.
The Servicer (or an affiliate of the Servicer) may, at its option,
repurchase a Mortgage Loan or REO Property which becomes 120 or more days
Delinquent or for which the Servicer has accepted a deed in lieu of
foreclosure, during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
occurred with respect to such Mortgage Loan and ending on the last Business
Day of such calendar quarter. If the Servicer (or an affiliate of the
Servicer) does not exercise its purchase right with respect to a Mortgage Loan
during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency
Date" of a Mortgage Loan shall mean the date on which the Mortgage Loan first
became 120 days Delinquent. Prior to repurchase pursuant to this Section 3.16,
the Servicer shall be required to continue to make monthly advances pursuant
to Section 4.07. 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 (i) delinquent
Mortgage Loan at a price equal to the Principal Balance of the Mortgage Loan
plus accrued interest thereon at the Mortgage Interest Rate from the date to
which interest has last been paid to the Trust Fund to the date of purchase
plus any unreimbursed Servicing Advances and Advances or (ii) REO Property at
its fair market value as determined in good faith by the Servicer. Any such
repurchase of a Mortgage Loan or REO Property pursuant to this Section 3.16
shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan or REO
Property to the Servicer to the extent necessary, including the prompt
delivery of all documentation to the Servicer.
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Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes), the Servicer shall deliver
to the Trustee (or the Custodian as the case may be) two executed copies of a
completed "Request for Release" in the form of Exhibit E. Upon receipt of such
Request for Release of Documents, the Trustee (or the Custodian as the case
may be) shall promptly release the related Mortgage File, in trust to (i) the
Servicer, or (ii) such other party identified in the related Request for
Release. Upon any such payment in full, or the receipt of such notification
that such funds have been placed in escrow, the Servicer shall direct the
Trustee in writing to execute an instrument of satisfaction (or assignment of
Mortgage without recourse) regarding the Mortgaged Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account. In lieu of
executing any such satisfaction or assignment, as the case may be, the
Servicer may prepare and submit to the Trustee a satisfaction (or assignment
without recourse, if requested by the Person or Persons entitled thereto) in
form for execution by the Trustee with all requisite information completed by
the Servicer; in such event, the Trustee shall execute and acknowledge such
satisfaction or assignment, as the case may be, and deliver the same with the
related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy
relating to a Mortgage Loan, the Trustee shall (except in the case of the
payment or liquidation pursuant to which the related Mortgage File is released
to an escrow agent or an employee, agent or attorney of the Trustee), upon
written request of the Servicer and delivery to the Trustee (or the Custodian,
as the case may be) of two executed copies of a "Request for Release" in the
form of Exhibit E signed by a Servicing Officer, release the related Mortgage
File to the Servicer and shall execute such documents as shall be necessary to
the prosecution of any such proceedings, including, without limitation, an
assignment without recourse of the related Mortgage to the Servicer. Such
receipt shall obligate the Servicer to return the Mortgage File to the Trustee
(or the Custodian, as the case may be) when the need therefor by the Servicer
no longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a Request for Release evidencing such liquidation, the receipt
shall be released by the Trustee (or the Custodian, as the case may be) to the
Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of
properties subject to Mortgages and (iv) second mortgage subordination
agreements. No application for approval shall be considered by the Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the Trustee
(which opinion shall not be an expense of the Trustee or the Trust Fund) that
such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Fund
as a REMIC or cause any REMIC constituting part of the Trust Fund to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC
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Provisions; (x) the provisions of the related Note and Mortgage have been
complied with; (y) the Combined Loan-to-Value Ratio and debt-to-income ratio
after any release does not exceed the maximum Combined Loan-to-Value Ratio and
debt-to-income ratio established in accordance with the underwriting standards
of the Mortgage Loans; and (z) the lien priority of the related Mortgage is
not affected. Upon receipt by the Trustee of a Servicing Officer's certificate
setting forth the action proposed to be taken in respect of a particular
Mortgage Loan and certifying that the criteria set forth in the immediately
preceding sentence have been satisfied, the Trustee shall execute and deliver
to the Servicer the consent or partial release so requested by the Servicer. A
proposed form of consent or partial release, as the case may be, shall
accompany any Servicing Officer's certificate delivered by the Servicer
pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties). The Servicer shall be entitled to
retain additional servicing compensation in the form of release fees, bad
check charges, assumption fees, modification or extension fees, late payment
charges, or any other service-related fees, Insurance Proceeds and Liquidation
Proceeds not required to be deposited in the Collection Account and similar
items, to the extent collected from Mortgagors.
Section 3.19 Annual Statement as to Compliance.
(a) The Servicer, at its own expense, will deliver to the Trustee
and the Depositor, not later than 90 days following the end of the fiscal year
of the Servicer which as of the Startup Day ends on the last day of December,
commencing with the 2002 fiscal year, a Servicing Officer's certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Servicer during such preceding fiscal year (or such shorter period in the case
of the first such report) 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 its
obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such
default known to such officers and the nature and status thereof including the
steps being taken by the Servicer to remedy such default.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and their receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Not later than 90 days following the end of each fiscal year of
the Servicer commencing with the 2002 fiscal year, the Servicer, at its
expense, shall cause a nationally recognized firm of independent certified
public accountants to furnish to the Trustee and the Depositor a report
stating that (i) it has obtained a letter of representation regarding certain
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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 either the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association
of America or the Audit Program for Mortgages serviced by ▇▇▇▇▇▇▇ Mac, with
respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. Immediately upon receipt of such
report, the Servicer shall furnish a copy of such report to the Trustee, the
Depositor 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.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and its receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(c) The Trustee shall, on behalf of the Trust Fund, file with the
Securities and Exchange Commission any and all reports, statements and
information respecting the Trust which the Depositor determines are required
to be filed with the Securities and Exchange Commission pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, each such
report, statement and information to be filed on or prior to the required
filing date for such report, statement or information. Upon the request of the
Trustee, each of the Seller, the Servicer and the Depositor shall cooperate
with the Trustee in the preparation of any such report and shall provide to
the Trustee in a timely manner all such information or documentation as the
Trustee may reasonably request in connection with the performance of its
duties and obligations under this Section.
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall provide to the Trustee, Certificateholders that
are federally insured savings and loan associations, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of each of the
foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at
the offices of the Servicer designated by it.
Section 3.22 Reserved.
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account an amount
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("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls on the Actuarial Mortgage Loans for the related
Distribution Date resulting from Principal Prepayments on the Actuarial
Mortgage Loans during the related Prepayment Period and (B) 50% of its
aggregate Servicing Fee received in the related Collection Period. The
Servicer shall apply Compensating Interest to offset any Prepayment Interest
Shortfalls on the Actuarial Mortgage Loans. The Servicer shall not have the
right to reimbursement for any amounts remitted to the Trustee for deposit in
the Distribution Account 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 Prepayment Interest Shortfalls on Simple
Interest Mortgage Loans or Relief Act Interest Shortfalls.
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or 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 deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account to invest the funds in the Collection Account in one or
more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon, 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. In the absence of such
direction, funds in the Collection Account shall remain uninvested. Any such
Permitted Investments shall be held to maturity, unless payable on demand.
Funds in the Distribution Account shall be uninvested. Any investment of funds
in the Collection Account shall be made in the name of the Trustee or the
Servicer, as applicable (in its capacity as such) or in the name of a nominee
of the Trustee. In the event amounts on deposit in the Collection Account are
at any time invested in a Permitted Investment payable on demand, the Trustee
shall at the direction of the Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
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(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in
the Collection Account.
(b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss.
(c) 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.
The Trustee shall not in any way be held liable by reason of any
insufficiency in any Account held by the Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that
the Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Seller, the Depositor and each
Certificateholder harmless against any and all claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and
any other costs, fees and expenses that the Trustee, the Depositor and any
Certificateholder may sustain in any way related to the failure of the
Servicer to perform its duties and service the Mortgage Loans in compliance
with the Servicing Standards. The Servicer shall immediately notify the
Trustee, the Depositor and each Certificateholder if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Servicer shall assume (with the consent of the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against the Servicer, the Trustee, the Depositor and/or
Certificateholder in respect of such claim. The provisions of this Section
3.26 shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
(b) None of the Depositor, the Seller, the Servicer, or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller or the Servicer or any such Person against any breach of
warranties or representations made herein, or against
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any specific liability imposed on the Servicer for a breach of the Servicing
Standard, or against any liability which would otherwise be imposed by reason
of its respective willful misfeasance, bad faith, fraud or negligence in the
performance of its duties or by reasons of negligent disregard of its
respective obligations or duties hereunder.
The Depositor, the Servicer, the Seller and any director, officer,
employee or agent of the Depositor, the Seller or the Servicer, may rely in
good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person with respect to any matters
arising hereunder. The Depositor, the Servicer, the Seller, and any director,
officer, employee or agent of the Depositor, the Seller or the Servicer shall
be indemnified and held harmless by the Trust Fund against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty hereunder or (in the case of the Servicer) a breach
of the Servicing Standard in the performance of its respective duties or by
reason of negligent disregard of its respective obligations or duties
hereunder. Neither the Depositor, the Seller nor the Servicer shall be under
any obligation to appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement and in its
opinion does not expose it to any expense or liability; provided, however,
that the Depositor, the Seller or the Servicer may in its discretion undertake
any action related to its obligations hereunder which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder.
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
On or before the last day of February of each year beginning in
2003, the Servicer shall file the reports of foreclosure and abandonment of
any Mortgaged Property required by Section 6050J of the Code with the Internal
Revenue Service and provide an Officer's Certificate certifying its compliance
with this Section 3.27 to the Trustee. The reports from the Servicer shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Section 6050J.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell assets;
or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
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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 receive amounts available
from the Collection Account pursuant to Section 3.05 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
3.05 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 3.05 hereof to the extent
permitted under Section 3.29(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Facility Person and the Servicer's
Assignee, shall be entitled to receive reimbursements of Advances and/or
Servicing Advances in accordance with Section 3.05 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 to the same extent as the
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Servicer would have been entitled to receive reimbursement. 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, the Trustee, any successor Servicer and the Trust Fund resulting
from any claim by the related Advancing Financing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or willful misconduct on the part of the Depositor,
the Trustee or any successor Servicer, as the case may be, or failure by the
successor Servicer or the Trustee, as the case may be, to remit funds as
required by this Agreement or the commission of an act or omission to act by
the successor Servicer or the Trustee, as the case may be, and the passage of
any applicable cure or grace period, such that an Event of Default under this
Agreement occurs or such entity is subject to termination for cause 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) [Reserved].
(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 4.07(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.
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(g) Any amendment to this Section 3.29 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.29, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 11.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The
parties hereto hereby acknowledge and agree that: (1) 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; (2) 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 (3) 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.
Section 3.30 SEC Reporting.
(a) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter, within 15 days after each Distribution
Date, the Trustee shall, in accordance with industry standards, file with the
Securities and Exchange Commission (the "Commission") via the Electronic Data
Gathering and Retrieval System (▇▇▇▇▇), a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Upon any filing with the Commission, the Trustee shall deliver to the
Servicer a copy of any such executed report, statement or information. Prior
to January 30, 2003, the Trustee shall, in accordance with industry standards,
file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 31, 2003, the Trustee shall file (but will not
execute) a Form 10-K, in substance conforming to industry standards, with
respect to the Trust Fund. The Depositor hereby grants to the Trustee a
limited power of attorney to execute and file each such document on behalf of
the Depositor. Such power of attorney shall continue until either the earlier
of (i) receipt by the Trustee from the Depositor of written termination of
such power of attorney and (ii) the termination of the Trust Fund. The
Depositor agrees to promptly furnish to the Trustee, from time to time upon
request, such further information, reports, and financial statements within
its control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems appropriate to prepare and file all necessary reports with
the Commission. In addition, the Form 10-K shall include the certification
required pursuant to Rule 13a-14 under the Securities and Exchange Act of
1934, as amended (the "Form 10-K Certification") signed by a senior officer of
the Servicer in charge of servicing. The Trustee shall have no responsibility
to file any items other than those specified in this section. The Trustee
shall sign a certification (the "Trustee Back-Up Certificate) in the form
attached hereto as Exhibit W for the benefit of the Person(s) signing the Form
10-K Certification regarding certain aspects of such Form 10-K Certification
(provided, however, that the Trustee shall not be required to undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K).
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(b) The Trustee shall indemnify and hold harmless the Servicer and
its officers, directors and Affiliates (each, a "Trustee Indemnified Party"
and, collectively, the "Trustee Indemnified Parties) 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
the Trustee's failure to deliver the Trustee Back-Up Certificate pursuant to
this Section 3.30 or any inaccuracy in the Trustee Back-Up Certificate other
than any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of the Servicer's breach of its obligations under this Agreement.
If the indemnification provided for herein is unavailable or insufficient to
hold harmless a Trustee Indemnified Parties, then the Trustee shall contribute
to the amount paid or payable by such Trustee Indemnified Party as a result of
the losses, claims, damages or liabilities of such Trustee Indemnified Party
in such proportion as is appropriate to reflect the relative fault of the
Trustee Indemnified Parties on the one hand and the Trustee on the other.
(c) The Servicer shall indemnify and hold harmless the Trustee and
its officers, directors and Affiliates (each, a "Servicer Indemnified Party"
and, collectively, the "Servicer Indemnified Parties") 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 failure of the Servicer to file the Form 10-K Certification as
contemplated under this Section 3.30 other than any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Trustee's
breach of its obligations under this Agreement. If the indemnification
provided for herein is unavailable or insufficient to hold harmless a Servicer
Indemnified Parties, then the Servicer shall contribute to the amount paid or
payable by such Servicer Indemnified Party as a result of the losses, claims,
damages or liabilities of such Servicer Indemnified Party in such proportion
as is appropriate to reflect the relative fault of the Servicer Indemnified
Parties on the one hand and the Servicer on the other.
(d) If the Commission issues additional interpretative guidance or
promulgates additional rules or regulations, or if other changes in applicable
law occur, that would require the reporting arrangements, or the allocation of
responsibilities with respect thereto, described in this Section 3.30, to be
conducted differently than as described, the Depositor, Servicer and Trustee
will reasonably cooperate to amend the provisions of this Section in order to
comply with such amended reporting requirements and such amendment of this
Section. Any such amendment shall be made in accordance with the first
paragraph of Section 11.01 without further consent of the Certificateholders
and without the requirement to deliver (i) notice in writing to the Depositor,
the Servicer and the Trustee from the Rating Agencies that such action will
not result in the reduction or withdrawal of the rating of any outstanding
Class of Certificates with respect to which it is a Rating Agency or (ii) an
Opinion of Counsel delivered to the Servicer and the Trustee. Such amendment
may result in the reduction of the reports filed by the Trustee on behalf of
the Trust under the Exchange Act. Notwithstanding the foregoing, the
Depositor, Servicer and Trustee shall not be obligated to enter into any
amendment pursuant to this Section that adversely affects its obligations and
immunities under this Agreement.
(e) In filing any Form 8-K or Form 10-K, the Trustee shall not
undertake any analysis of, and shall have no responsibility for, any financial
information, accountant's report,
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certification or other matter contained therein, except for computations
performed by the Trustee and reflected in distribution reports.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Group 1 Interest Remittance Amount, the Group 2
Interest Remittance Amount and the Group 3 Interest Remittance Amount and
apply them in the following order of priority (based upon the Mortgage Loan
information provided to it in the Remittance Report, upon which the Trustee
may conclusively rely, and the calculations required to be made by the
Trustee), in each case to the extent of the Group 1 Interest Remittance
Amount, the Group 2 Interest Remittance Amount or the Group 3 Interest
Remittance Amount, as applicable, remaining for such Distribution Date:
(a) the Group 1 Interest Remittance Amount will be distributed:
(i) first, to the Trustee, the portion of the Trustee Fee for such
Distribution Date relating to the Group 1 Mortgage Loans;
(ii) second, concurrently, to the Class A-IO Certificates, the Group
1 Class A-IO Interest Component Amount for such Distribution Date and the
Interest Carry Forward Amount for the Group 1 Class A-IO Interest
Component and Distribution Date and to the Class 1-A1 Certificates, the
Accrued Certificate Interest and any Interest Carry Forward Amount for
such Class and Distribution Date, allocated pro rata based on entitlement
pursuant to this clause (a)(ii);
(iii) third, concurrently, (1) to the Class A-IO Certificates, the
Group 2 Class A-IO Interest Component Amount, the Group 3 Class A-IO
Interest Component Amount and the Interest Carry Forward Amounts for the
Group 2 and Group 3 Class A-IO Interest Components, in each case for such
Distribution Date, (2) to the Class 2-A1 Certificates, the Accrued
Certificate Interest and Interest Carry Forward Amount for such Class and
such Distribution Date, and (3) to the Class 3-F1 Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for such
Class and such Distribution Date, in each case to the extent not paid
pursuant to clauses (b)(ii) and (c)(ii) below, allocated pro rata based
on entitlement pursuant to this clause (a)(iii)
(b) the Group 2 Interest Remittance Amount will be distributed:
(i) first, to the Trustee, the portion of the Trustee Fee for such
Distribution Date relating to the Group 2 Mortgage Loans;
(ii) second, concurrently, to the Class A-IO Certificates, the Group
2 Class A-IO Interest Component Amount for such Distribution Date and the
Interest Carry Forward Amount for the Group 2 Class A-IO Interest
Component and Distribution Date
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and to the Class 2-A1 Certificates, the Accrued Certificate Interest and
Interest Carry Forward Amount for such Class and Distribution Date,
allocated pro rata based on entitlement pursuant to this clause (b)(ii);
and
(iii) third, concurrently, (1) to the Class A-IO Certificates, the
Group 1 Class A-IO Interest Component Amount, the Group 3 Class A-IO
Interest Component Amount and the Interest Carry Forward Amounts for the
Group 1 and Group 3 Class A-IO Interest Components, in each case for such
Distribution Date, (2) to the Class 1-A1 Certificates, the Accrued
Certificate Interest and Interest Carry Forward Amount for such Class and
such Distribution Date, and (3) to the Class 3-F1 Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for such
Class and such Distribution Date, in each case to the extent not paid
pursuant to clause (a)(ii) above and clause (c)(ii) below, allocated pro
rata based on entitlement pursuant to this clause (b)(iii);
(c) the Group 3 Interest Remittance Amount will be distributed:
(i) first, to the Trustee, the portion of the Trustee Fee for such
Distribution Date relating to the Group 3 Mortgage Loans;
(ii) second, concurrently, to the Class A-IO Certificates, the Group
3 Class A-IO Interest Component Amount for such Distribution Date and the
Interest Carry Forward Amount for the Group 3 Class A-IO Interest
Component and Distribution Date and to the Class 3-F1 Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for such
Class and Distribution Date, allocated pro rata based on entitlement
pursuant to this clause (c)(ii); and
(iii) third, concurrently, (1) to the Class A-IO Certificates, the
Group 1 Class A-IO Interest Component Amount, the Group 2 Class A-IO
Interest Component Amount and the Interest Carry Forward Amounts for the
Group 1 and Group 2 Class A-IO Interest Components, in each case for such
Distribution Date, (2) to the Class 1-A1 Certificates, the Accrued
Certificate Interest and Interest Carry Forward Amount for such Class and
such Distribution Date, and (3) to the Class 2-A1 Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for such
Class and such Distribution Date, in each case to the extent not paid
pursuant to clauses (a)(ii) and (b)(ii) above, allocated pro rata based
on entitlement pursuant to this clause (c)(iii);
(d) any Group 1 Interest Remittance Amount and Group 2 Interest
Remittance Amount remaining undistributed following the distributions pursuant
to clauses (a) and (b) above will be distributed:
(i) first, to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ii) second, concurrently to the Class M-2V and M-2F Certificates,
the Accrued Certificate Interest thereon for such Distribution Date,
allocated pro rata based on the Accrued Certificate Interest thereon;
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(iii) third, to the Class B-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(iv) fourth, to the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(v) fifth, to the Class B-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(d) the amount, if any, of the Group 1 Interest Remittance Amount,
the Group 2 Interest Remittance Amount and the Group 3 Interest
Remittance Amount remaining after application with respect to the
priorities set forth above will be applied as described under Section
4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) On each Distribution Date, the Trustee shall distribute the
Group 1 Principal Distribution Amount, the Group 2 Principal Distribution
Amount and the Group 3 Principal Distribution Amount in the following amounts
and order of priority (based upon the Mortgage Loan information provided to it
in the Remittance Report), and the calculations required to be made by the
Trustee, in each case to the extent of the Group 1 Principal Distribution
Amount, the Group 2 Principal Distribution Amount or the Group 3 Principal
Distribution Amount, as applicable, remaining for such Distribution Date:
(i) With respect to any Distribution Date before the Stepdown Date
or with respect to which a Trigger Event is in effect:
(A) the Group 1 Principal Distribution Amount will be
distributed:
(1) first, to the Class 1-A1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(2) second, concurrently to the Class 2-A1 and Class 3-F1
Certificates, until the Certificate Principal Balances thereof
have been reduced to zero, in each case to the extent not paid
pursuant to clauses (B)(1) and (C)(1) below, allocated pro rata
based on the Certificate Principal Balances thereof;
(B) the Group 2 Principal Distribution Amount will be
distributed:
(1) first, to the Class 2-A1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(2) second, concurrently to the Class 1-A1 and Class 3-F1
Certificates, until the Certificate Principal Balances thereof
have been reduced to zero, in each case to the extent not paid
pursuant to clauses (A)(1) above and clause (C)(1) below,
allocated pro rata based on the Certificate Principal Balances
thereof;
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(C) the Group 3 Principal Distribution Amount will be
distributed:
(1) first, to the Class 3-F1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(2) second, concurrently, to the Class 1-A1 and Class 2-A1
Certificates, until the Certificate Principal Balances thereof
have been reduced to zero, in each case to the extent not paid
pursuant to clauses (A)(1) and (B)(1) above, allocated pro rata
based on the Certificate Principal Balances thereof;
(D) any Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount and Group 3 Principal Distribution
Amount remaining undistributed following the distributions pursuant
to clauses (i)(A), (i)(B) and (i)(C) above will be distributed:
(1) first, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(2) second, concurrently to the Class M-2V and Class M-2F
Certificates, until the Certificate Principal Balances thereof
have been reduced to zero, allocated pro rata based on the
Certificate Principal Balances thereof;
(3) third, to the Class B-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(4) fourth, to the Class B-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(5) fifth, to the Class B-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
(E) the amount, if any, of the Group 1 Principal Distribution
Amount, the Group 2 Principal Distribution Amount and the Group 3
Principal Distribution Amount remaining after application with
respect to the priorities set forth above in clauses (i)(A), (i)(B),
(i)(C) and (i)(D) will constitute part of the "Monthly Excess
Cashflow Amount" for such Distribution Date and will be applied as
set forth in Section 4.02(b).
(ii) With respect to any Distribution Date on or after the Stepdown
Date or with respect to which a Trigger Event is not in effect:
(A) the Group 1 Principal Distribution Amount will be
distributed:
(1) first, to the Class 1-A1 Certificates, the Class 1-A1
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero; and
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(2) second, concurrently to the Class 2-A1 and Class 3-F1
Certificates, any remaining Class 2-A1 Principal Distribution
Amount and Class 3-F1 Principal Distribution Amount,
respectively, in each case to the extent not paid pursuant to
clauses (B)(1) and (C)(1) below, until the Certificate
Principal Balance of each such Class has been reduced to zero,
allocated pro rata based on entitlement pursuant to this clause
(A)(2);
(B) the Group 2 Principal Distribution Amount will be
distributed:
(1) first, to the Class 2-A1 Certificates, the Class 2-A1
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero; and
(2) second, concurrently to the Class 1-A1 and Class 3-F1
Certificates, any remaining Class 1-A1 Principal Distribution
Amount and Class 3-F1 Principal Distribution Amount,
respectively, in each case to the extent not paid pursuant to
clause (A)(1) above and (C)(1) below, until the Certificate
Principal Balance of each such Class has been reduced to zero,
allocated pro rata based on entitlement pursuant to this clause
(B)(2);
(C) the Group 3 Principal Distribution Amount will be
distributed:
(1) first, to the Class 3-F1 Certificates, the Class 3-F1
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero; and
(2) second, concurrently to the Class 1-A1 and Class 2-A1
Certificates, any remaining Class 1-A1 Principal Distribution
Amount and Class 2-A1 Principal Distribution Amount,
respectively, in each case to the extent not paid pursuant to
clauses (A)(1) and (B)(1) above, until the Certificate
Principal Balance of each such Class has been reduced to zero,
allocated pro rata based on entitlement pursuant to this clause
(C)(2);
(D) any Group 1 Principal Distribution Amount, Group 2
Principal Distribution Amount and Group 3 Principal Distribution
Amount remaining undistributed following the distributions pursuant
to clauses (ii)(A), (ii)(B) and (ii)(C) above will be distributed:
(1) first, to the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero;
(2) second, concurrently to the Class M-2V and Class M-2F
Certificates, the Class M-2 Principal Distribution Amount,
until the Certificate Principal Balances of such Classes has
been reduced to zero, allocated pro rata based on the
Certificate Principal Balances thereof;
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(3) third, to the Class B-1 Certificates, the Class B-1
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero;
(4) fourth, to the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero; and
(5) fifth, to the Class B-3 Certificates, the Class B-3
Principal Distribution Amount, until the Certificate Principal
Balance of such Class has been reduced to zero;
(E) the amount, if any, of the Group 1 Principal Distribution
Amount, the Group 2 Principal Distribution Amount and the Group 3
Principal Distribution Amount remaining after application with
respect to the priorities set forth above in clauses (ii)(A),
(ii)(B), (ii)(C) and (ii)(D) will constitute part of the "Monthly
Excess Cashflow Amount" for such Distribution Date and will be
applied as set forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to the Class or Classes of Certificates then entitled to receive
distributions in respect of principal, in an amount equal to the Extra
Principal Distribution Amount for such Distribution Date, payable to such
holders as part of the related Principal Distribution Amount;
(ii) to the Class M-1 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(iii) to the Class M-1 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(iv) to the Class M-1 Certificates, the Unpaid Realized Loss Amount
for such Class and Distribution Date;
(v) concurrently to the Class M-2V and Class M-2F Certificates, any
remaining Accrued Certificate Interest for such Classes and Distribution
Date, allocated pro rata based on such remaining Accrued Certificate
Interest;
(vi) concurrently to the Class M-2V and Class M-2F Certificates, the
Interest Carry Forward Amount for such Classes and Distribution Date, if
any, allocated pro rata based on such remaining Interest Carry Forward
Amounts;
(vii) concurrently to the Class M-2V and M-2F Certificates, the
Unpaid Realized Loss Amount for such Classes and Distribution Date,
allocated pro rata basedon such Unpaid Realized Loss Amounts;
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(viii) to the Class B-1 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(ix) to the Class B-1 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(x) to the Class B-1 Certificates, the Unpaid Realized Loss Amount
for such Class and Distribution Date;
(xi) to the Class B-2 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xii) to the Class B-2 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xiii) to the Class B-2 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(xiv) to the Class B-3 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xv) to the Class B-3 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xvi) to the Class B-3 Certificates, the Unpaid Realized Loss Amount
for such Class and Distribution Date;
(xvii) to the Basis Risk Reserve Fund, the Basis Risk Reserve Fund
Deposit;
(xviii) to pay the Class N Certificates, (x) the Accrued Certificate
Interest for the Class N Certificates, (y) the Interest Carry Forward
Amount for the Class N Certificates and (z) any remaining Monthly Excess
Cashflow Amount to reduce the Notional Amount for the Class N
Certificates, until the Notional Amount for such Class has been reduced
to zero; and
(xix) to the Class X Certificates, the Class X Distributable Amount.
On each Distribution Date, there shall be distributed to Holders of
the Residual Certificates, any remaining amount in the Distribution
Account on such date after the application pursuant to Sections 4.01,
4.02(a), 4.02(b)(i)-(xix) and 4.02(c).
(c) On each Distribution Date, all prepayment penalties (including
amounts deposited in connection with the full or partial waiver of such
prepayment penalties pursuant to Section 3.01) shall be allocated to the Class
N Certificates for so long as the Notional Amount of the Class N Certificates
is greater than zero pursuant to Section 4.02(b)(xviii) above), and to the
Class X Certificates after the Class N Notional Amount has been reduced to
zero.
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Section 4.03 Allocation of Losses.
If, after giving effect to the distribution of the Principal
Distribution Amount on any Distribution Date the aggregate Certificate
Principal Balance of the Offered Certificates and the Class B-2 Certificates
exceeds the Pool Balance as of the end of the related Collection Period, such
excess will be allocated to reduce the Certificate Principal Balance of the
Class B-3, Class B-2, Class B-1, Class M-2 and Class M-1 Certificates, in that
order, until the respective Certificate Principal Balances thereof are reduced
to zero. Any such excess allocated to the Class M-2 Certificates will be
allocated pro rata between the Class M-2V and Class M-2F Certificates based on
the Certificate Principal Balances thereof. Any reduction of a Certificate
Principal Balance of a class of Certificates is an "Applied Realized Loss
Amount" for such class.
Section 4.04 Method of Distribution.
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 Certificates, by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date and is the registered owner of such Certificates the aggregate initial
Certificate Principal Balance or Notional Amount of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Trustee may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate
are to be made by the Depository and the Depository Participants in accordance
with the provisions of the Certificates. None of the Trustee, the Depositor,
the Servicer or the Seller shall have any responsibility therefor except as
otherwise provided by applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based, as applicable, on the Mortgage
Loan information contained in the Remittance Report, the Trustee shall prepare
and post on its website at ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ a statement as to the
distributions made on such Distribution Date:
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(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to principal or
reduction of Notional Amount, separately identified;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class X Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the
Overcollateralization Target Amount as of such Distribution Date and the
Monthly Excess Interest Amount and Monthly Excess Cashflow Amount for
such Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Servicer during the related Collection Period;
(v) the aggregate amount of Advances in respect of the Trust Fund
and each Loan Group for the related Collection Period;
(vi) the Pool Balance and each Group Balance at the close of
business at the end of the related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans in the
Trust Fund and in each Loan Group as of the related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans in the Trust Fund and in each Loan Group (a) 30 to 59 days past due
on a contractual basis, (b) 60 to 89 days past due on a contractual
basis, (c) 90 or more days past due on a contractual basis, (d) as to
which foreclosure proceedings have been commenced and (e) in bankruptcy
as of the close of business on the last day of the calendar month
preceding such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Loan Group of
such Mortgage Loan, the unpaid principal balance and the Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(x) the book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal
balance of all REO Properties in the Trust Fund and each Loan Group as of
the close of business of the last day of the preceding Collection Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period, both for the Trust Fund as a whole as well as
for each Loan Group;
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(xii) the aggregate amount of prepayment penalties collected
(including amounts deposited in connection with the full or partial
waiver of such prepayment penalties pursuant to Section 3.01) during the
related Collection Period and the amounts thereof allocable to the Class
N Certificates and the Class X Certificates;
(xiii) the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses,
in each case for the Trust Fund as a whole as well as for each Loan
Group;
(xiv) the Certificate Principal Balance, or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses or Applied Realized
Loss Amounts, as applicable, made on such Distribution Date, separately
identifying any reduction thereof due to allocations of Realized Losses
or Applied Realized Loss Amounts;
(xv) the Accrued Certificate Interest in respect of each Class of
Offered Certificates (other than the Class A-IO Certificates) and the
Class B-2 and Class B-3 Certificates for such Distribution Date,
separately identifying the portions thereof attributable to Net Rate
Carryover Amounts, and the respective portions thereof, if any, remaining
unpaid following the distributions made in respect of such Certificates
on such Distribution Date;
(xvi) the Group 1 Class A-IO Component Notional Amount, the Group 2
Class A-IO Component Notional Amount and the Group 3 Class A-IO Component
Notional Amount;
(xvii) 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 3.23;
(xviii) the amount of the Trustee Fee paid;
(xix) the beginning and ending balances of the Basis Risk Reserve
Fund on such Distribution Date, the Basis Risk Reserve Fund Deposit for
such Distribution Date, and the Required Basis Risk Reserve Fund Amount
for such Distribution Date;
(xx) the Net Rate Carryover Amounts distributed on such Distribution
Date, separately identifying any Net Rate Carryover Amounts paid from
amounts received in respect of the Interest Rate Cap Agreements, and any
Net Rate Carryover Amounts remaining after giving effect to distributions
thereof on such Distribution Date;
(xxi) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xxii) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xxiii) the Available Funds;
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(xxiv) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxv) the Liquidation Report for such Distribution Date;
(xxvi) the aggregate Principal Balance of Mortgage Loans in each
Loan Group and in the Trust Fund purchased by the Servicer or Seller
during the related Collection Period and indicating the Section of this
Agreement requiring or allowing the purchase of each such Mortgage Loan;
and
(xxvii) the aggregate Principal Balance of the Mortgage Loans in
each Loan Group and in the Trust Fund repurchased by the Servicer (or an
affiliate) during the related Collection Period in connection with
Section 3.16.
Parties that are unable to use ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ are
entitled to have a paper copy mailed to them via first class mail by calling
the Trustee at (▇▇▇) ▇▇▇-▇▇▇▇ 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.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.
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 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), (ii), (xv) and (xx) 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 provide to the
Residual Certificateholders a copy of the reports provided to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. 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
Residual Certificateholders by the Trustee pursuant to any requirements of the
Code as from time to time in force.
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Section 4.07 Remittance Reports; Advances.
(a) On the second Business Day following each Determination Date but
in no event less than four Business Days prior to the related Distribution
Date, the Servicer shall deliver to the Trustee by telecopy (or by such other
means as the Servicer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall forward to the Trustee by overnight mail a computer
readable magnetic tape or diskette or in such other medium as may be agreed
between the Servicer and the Trustee containing the information set forth in
such Remittance Report with respect to the related Distribution Date. Not
later than the close of business New York time on the Servicer Remittance
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 request or order in order for the Trustee to
perform the calculations necessary to make the distributions contemplated by
Section 4.01, 4.02 and 4.03 and to prepare the statements to
Certificateholders contemplated by Section 4.06. 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 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Actuarial 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 Prepayment Period and as to which such REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the interest portion of the Monthly Payments (net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property deposited in the Collection Account pursuant to Section 3.13 for
distribution on such Distribution Date. For purposes of the preceding
sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent
Balloon Payment is equal to the assumed monthly payment that would have been
due on the related Due Date based on the original principal amortization
schedule for the such Balloon Mortgage Loan. The Servicer shall not be
obligated to make any Advance with respect to Simple Interest Mortgage Loans.
On or before the close of business 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 the Collection Account that amounts held
for future distribution have been, as permitted by this Section 4.07, 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 and so used 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
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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 and 4.02 on such
Distribution Date if such amounts held for future distributions had not been
so used to make Advances. The Trustee will provide notice to the Servicer by
telecopy by the close of business on any Servicer Remittance Date in the event
that the amount remitted by the Servicer to the Trustee 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 or REO Property, shall
continue until the earlier of such time as such Mortgage Loan is paid in full
by the Mortgagor or disposed of by the Trust, or until the recovery of all
Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if
such 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, 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 4.08 Basis Risk Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Class 1-A1, Class
2-A1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F, Class B-1, Class B-2 and Class B-3
Certificates, the Basis Risk Reserve Fund. The Basis Risk Reserve Fund shall
be an Eligible Account, and funds on deposit therein shall be held separate
and apart from, and shall not be commingled with, any other moneys, including
without limitation, other moneys held by the Trustee pursuant to this
Agreement.
(b) On the Closing Date, $5,000 will be deposited by the Depositor
into the Basis Risk Reserve Fund. On each Distribution Date, the Trustee shall
transfer from the Distribution Account to the Basis Risk Reserve Fund pursuant
to Section 4.02(b)(xvii), the Basis Risk Reserve Fund Deposit. Following the
distribution of amounts on deposit in the Interest Rate Cap Account pursuant
to Section 4.09(e) hereof on any Distribution Date and the deposit of the
Basis Risk Reserve Fund Deposit in the Basis Risk Reserve Fund on such
Distribution Date pursuant to Section 4.02(b)(xvii) hereof, the Trustee shall
withdraw any amounts on deposit in the Basis Risk Reserve Fund in the
following amounts and order of priority:
(i) concurrently to the Class 1-A1 and Class 2-A1 Certificates, any
unpaid Net Rate Carryover Amounts for such Classes, pro rata on the basis
of such unpaid Net Rate Carryover Amounts;
(ii) to the Class M-1 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
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(iii) concurrently to the Class M-2V and Class M-2F Certificates,
any unpaid Net Rate Carryover Amounts for such Classes, allocated pro
rata based on such unpaid Net Rate Carryover Amounts;
(iv) to the Class B-1 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(v) to the Class B-2 Certificates, any unpaid Net Rate Carryover
Amounts for such Class; and
(vi) to the Class B-3 Certificates, any unpaid Net Rate Carryover
Amounts for such Class.
Any such amounts distributed shall be treated for federal tax
purposes as amounts distributed by the Class X-N REMIC to the Class X-N
Interest. On any Distribution Date, any amounts on deposit in the Basis Risk
Reserve Fund in excess of the Required Basis Risk Reserve Fund Amount shall be
distributed to the Class X-N Interest pursuant to Section 4.02(b)(xviii) until
the Class N Notional Amount is reduced to zero and then pursuant to Section
4.02(b)(xix) hereof, until the Class X Notional Amount is reduced to zero.
(c) Funds in the Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trustee at the direction of the majority holder of the
Class X Certificates. In the absence of such direction, funds in the Basis
Risk Reserve Fund shall remain uninvested. Any net investment earnings on such
amounts shall be payable to the Class X Certificates. Amounts held in the
Basis Risk Reserve Fund from time to time shall continue to constitute assets
of the Trust Fund, but not of any REMIC created hereunder, until released from
the Basis Risk Reserve Fund pursuant to this Section 4.08. The Basis Risk
Reserve Fund constitutes an "outside reserve fund" within the meaning of
Treasury Regulation Section 1.860G-2(h) and is not an asset of any REMIC
created hereunder. For all federal tax purposes, amounts transferred by the
Class X-N REMIC to the Basis Risk Reserve Fund shall be treated as amounts
distributed by the Class X-N REMIC to the Class X-N Interest. The Class X-N
Interest shall evidence ownership of the Basis Risk Reserve Fund for federal
tax purposes and the Holders thereof shall direct the Trustee in writing as to
the investment of amounts therein. In the absence of such written direction,
all funds in the Basis Risk Reserve Fund shall remain uninvested. The Trustee
shall have no liability for losses on investments in Eligible Investments made
pursuant to this Section 4.08(c) (other than as obligor on any such
investments). Upon termination of the Trust Fund, any amounts remaining in the
Basis Risk Reserve Fund shall be distributed to the Class X-N Interest in the
same manner as if distributed pursuant to Section 4.02(b)(xix) hereof.
(d) On the Distribution Date immediately after the Distribution Date
on which the aggregate Class Principal Balance of the Class 1-A1, Class 2-A1,
Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F, Class B-1, Class B-2 and Class B-3
Certificates equals zero, any amounts on deposit in the Basis Risk Reserve
Fund not payable on the Class 1-A1, Class 2-A1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class
M-2F, Class B-1, Class B-2 or Class B-3 Certificates shall be distributed to
the Class X-N Interest in the same manner as if distributed pursuant to
Section 4.02(b)(xviii) and 4.02(b)(xix) hereof.
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Section 4.09 The Interest Rate Cap Agreements.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Certificates, the Interest Rate Cap
Account. The Interest Rate Cap Account shall be an Eligible Account, and funds
on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement. Funds in the Interest Rate Cap
Account may be invested in Eligible Investments by the Trustee at the
direction of the majority holder of the Class X Certificates. In the absence
of such direction, funds in the Interest Rate Cap Account shall remain
uninvested.
(b) The Depositor hereby directs the Trustee to enter into and
execute the Interest Rate Cap Agreements on the Closing Date on behalf of the
Trust. The Seller, the Depositor, the Servicer and the Certificateholders (by
their acceptance of such Certificates) acknowledge that JPMorgan Chase Bank is
entering into the Interest Rate Cap Agreement solely in its capacity as
Trustee of the Trust Fund and not in its individual capacity. Each Interest
Rate Cap Agreement will be an asset of the Trust but will not be an asset of
any REMIC and any amounts received thereon shall be taxable to the Class X
Certificateholder. The Trustee shall deposit any amounts received with respect
to each Interest Rate Cap Agreement into the Interest Rate Cap Account.
(c) The Trustee will prepare and deliver any notices required to be
delivered to the Interest Rate Cap Provider under any of the Interest Rate Cap
Agreements.
(d) The Trustee shall terminate any Interest Rate Cap Agreement upon
the occurrence of an event of default or termination event under such Interest
Rate Cap Agreement of which a Responsible Officer of the Trustee has actual
knowledge. In the event that any Interest Rate Cap Agreement is canceled or
otherwise terminated for any reason (other than the exhaustion of the interest
rate protection provided thereby), the Trustee shall, at the direction of the
majority holder of the related Certificates, and to the extent a replacement
contract is available (from a counterparty designated by the Depositor and
acceptable to the majority holder of the related Certificates), execute a
replacement contract comparable to the terminated Interest Rate Cap Agreement
providing interest rate protection which is equal to the then-existing
protection provided by the terminated Interest Rate Cap Agreement; provided,
however, that the cost of any such replacement contract providing the same
interest rate protection provided by such replacement contract may be reduced
to a level such that the cost of such replacement contract shall not exceed
the amount of any early termination payment received from the Interest Rate
Cap Provider. On any Distribution Date prior to the termination date for any
Interest Rate Cap Agreement, if the aggregate Certificate Principal Balance of
the Offered Certificates equals zero (prior to giving effect to any
distributions to be made on such Distribution Date), all amounts received by
the Trustee with respect to such Interest Rate Cap Agreement shall be
distributed directly to the Class X Certificateholder. Prior to the
termination date for any Interest Rate Cap Agreement Date and upon the
termination of the Trust, such Interest Rate Cap Agreement shall be assigned
to the Class X Certificateholder.
(e) Upon such a termination, the Interest Rate Cap Provider may be
required to pay an amount to the Trustee in respect of market quotations for
the replacement cost of such Interest Rate Cap Agreement.
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(f) On each Distribution Date, prior to any distributions pursuant
to Sections 4.01 and 4.02 hereof, the Trustee shall distribute amounts on
deposit in the Interest Rate Cap Account in respect of each Interest Rate Cap
Agreement to the Basis Risk Reserve Fund and from the Basis Risk Reserve Fund
to the Certificates in the following amounts and order of priority:
(i) to the classes of Certificates related to such Interest Rate Cap
Agreement, any Net Rate Carryover Amounts for such classes and such
Distribution Date, pro rata on the basis of such Net Rate Carryover
Amounts;
(ii) to the other classes of Certificates (other than the Class B-2
and Class B-3 Certificates) in respect of unpaid Net Rate Carryover
Amounts for such classes and Distribution Date in the priorities
indicated in the following table:
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Interest Rate Cap Class 1-A1 Class 2-A1 Class M-1 Class M-2V Class B-1
Agreement Interest Rate Interest Rate Cap Interest Rate Interest Rate Cap Interest Rate
Cap Agreement Agreement Cap Agreement Agreement Cap Agreement
----------------------------------------------------------------------------------------------------------------------
First Priority Class 1-A1 Class 2-A1 Class M-1 Class M-2V Class B-1
----------------------------------------------------------------------------------------------------------------------
Second Priority Class 2-A1 Class 1-A1 concurrently to concurrently to concurrently to
Class 1-A1 and Class 1-A1 and Class 1-A1 and
2-A1, pro rata 2-A1, pro rata 2-A1, pro rata
----------------------------------------------------------------------------------------------------------------------
Third Priority Class M-1 Class M-1 concurrently to Class M-1 Class M-1
Class M-2V and
M-2F, pro rata
----------------------------------------------------------------------------------------------------------------------
Fourth Priority concurrently to concurrently to Class B-1 Class M-2F concurrently to
Class M-2V and Class M-2V and Class M-2V and
M-2F, pro rata M-2F, pro rata M-2F, pro rata
----------------------------------------------------------------------------------------------------------------------
Fifth Priority Class B-1 Class B-1 N/A Class B-1 N/A
(if any)
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For purposes of this Section 4.09(e), a class of Certificates is "related" to
an Interest Rate Cap Agreement if its class designation appears in the name of
such Interest Rate Cap Agreement. For instance, the Class 1-A1 Certificates
are "related" to the Class 1-A1 Interest Rate Cap Agreement.
(g) Funds in the Interest Rate Cap Account may be invested in
Eligible Investments by the Trustee maturing on or prior to the next
succeeding Distribution Date. The Trustee shall account for the Interest Rate
Cap Account as an outside reserve fund within the
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meaning of Treasury regulation 1.860G-2(h) and not an asset of any REMIC
created pursuant to this Agreement. The Trustee shall treat amounts paid by
the Interest Rate Cap Account as payments made from outside the REMICs for all
Federal tax purposes. Any net investment earnings on such amounts shall be
payable to the Trustee (as additional compensation for its activities
hereunder) upon the termination of the Interest Rate Cap Account. The Trustee
will be the owner of the Interest Rate Cap Account for federal tax purposes
and the Holders of the Class X-N Interest shall direct the Trustee in writing
as to the investment of amounts therein. In the absence of such written
direction, all funds in the Interest Rate Cap Account shall remain uninvested.
The Trustee shall have no liability for losses on investments in Eligible
Investments made pursuant to this Section 4.13(f) (other than as obligor on
any such investments). Upon termination of the Trust Fund, any amounts
remaining in the Interest Rate Cap Account shall be distributed to the Seller.
(h) On the Distribution Date immediately after the Distribution Date
on which the aggregate Certificate Principal Balance of the Class 1-A1, Class
2-A1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F and Class B-1 Certificates equals
zero, any amounts on deposit in the Interest Rate Cap Account not payable on
such Certificates shall be distributed to the Trustee as additional
compensation for its activities hereunder.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class 1-A1, Class 2-A1, Class 3-F1, Class A-IO, Class
▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F, Class B-1, Class B-2, Class B-3, Class N, Class
X, Class R-1 and Class R-2 Certificates shall be substantially in the forms
annexed hereto as exhibits, and shall, on original issue, be executed by the
Trustee and authenticated and delivered by the Certificate Registrar to or
upon the receipt of a Written Order to Authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund.
Each Class of the Offered Certificates shall be initially evidenced by one or
more Certificates representing a Percentage Interest with a minimum dollar (or
notional amount) denomination of $25,000 and integral multiples of $1 in
excess thereof. The Class N, Class X, Class R-1 and Class R-2 Certificates are
issuable only in minimum Percentage Interests of 10%.
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 Certificate
Registrar 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
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to Section 5.02(c), the Offered Certificates shall be Book-Entry Certificates.
The Class B-2, Class N, Class X, Class R-1 and Class R-2 Certificates shall
not be Book-Entry Certificates but shall be issued in fully registered
certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee 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. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Servicer and the Depositor, such
resignation to become effective upon appointment of a successor Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Residual
Certificate, upon satisfaction of the conditions set forth below, the Trustee
on behalf of the Trust shall execute and the Certificate Registrar shall
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
the Certificate Registrar shall 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.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Custodian, on behalf of the Depository, if directed
to do so pursuant to instructions from the Depository. 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
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the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
for all purposes deal with the Depository as representative of the Certificate
Owners of the Certificates for purposes of exercising the rights of Holders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect
Certificate Owners; and (vii) the direct participants of the Depository shall
have no rights under this Agreement under or with respect to any of the
Certificates held on their behalf by the Depository, and the Depository may be
treated by the Trustee and its agents, employees, officers and directors as
the absolute owner of the Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Servicer
Event of Termination, the Certificate Owners of each Class of Book-Entry
Certificates representing Percentage Interests of such Classes aggregating not
less than 51% advises the Trustee and Depository through the Financial
Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate
Owners. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall, at the Depositor's
expense, in the case of (ii) above, or the Seller's expense, in the case of
(i) and (iii) above, execute on behalf of the Trust and the Certificate
Registrar shall authenticate the Definitive Certificates. None of the
Depositor or 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) Except with respect to the initial transfer of the Private
Certificates by the Depositor, no transfer, sale, pledge or other disposition
of any Private Certificate shall be made unless such disposition is exempt
from the registration requirements of the Securities Act of
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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, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Certificate Registrar, in
substantially the form attached hereto as Exhibit J) under the 1933 Act, the
Certificate Registrar 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 Certificate Registrar 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 Certificate Registrar or the Depositor or (ii) the Certificate
Registrar 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 Certificate Registrar certifying to the Depositor and
the Certificate Registrar the facts surrounding such transfer, which
investment letter shall not be an expense of the Certificate Registrar or the
Depositor. The Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Certificate Registrar
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 an ERISA-Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor, (such requirement
is satisfied only by the Certificate Registrar's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit
plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, nor a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer or (ii) (except in the case of a Class R-1, Class R-2, Class X, Class
N, Class B-2 or Class B-3 Certificate) if the purchaser is an insurance
company, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE
95-60 or (iii) in the case of any such ERISA-Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Certificate Registrar and the Depositor, and upon which the Trustee, the
Depositor and the Servicer shall be entitled to rely, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in a
nonexempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Depositor or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of clause (i) of the preceding sentence, such
representation shall be deemed to have been made to the Certificate Registrar
by the acceptance by a Certificate Owner of the beneficial interest in any
such Class of ERISA-Restricted Certificates, unless the Certificate Registrar
shall have received from the transferee an alternative representation
acceptable in form and substance to the Certificate Registrar and the
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Depositor. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the delivery to the
Certificate Registrar of an Opinion of Counsel satisfactory to the Certificate
Registrar as described above shall be void and of no effect.
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 Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Certificate Registrar 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, among other things, 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
Certificate Registrar 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 Certificate Registrar received the documents specified in
clause (iii). The
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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 Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of such
Residual Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event that
the Trustee determines that the Holder of such Residual Certificate may
be liable for any amount due under this Section or any other provisions
of this Agreement, the Trustee may withhold a corresponding amount from
such remittance as security for such claim. The terms and conditions of
any sale under this clause (v) shall be determined in the sole discretion
of the Trustee and it shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of its exercise
of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee 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 Trustee shall be entitled to
reasonable compensation for providing such information from the person to
whom it is provided.
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 Certificate Registrar, in form and substance satisfactory to
the Certificate Registrar, (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 hereunder to fail to qualify as a REMIC.
The beneficial ownership of the Class N Certificates and the Class X
Certificates shall not be transferred to a non-United States Person unless
such beneficial ownership is transferred to a non-United States Person who
will at all times be a Proportionate Holder. Neither the Class N nor the Class
X Certificates shall be pledged or used as collateral for any other obligation
if it would cause any portion of the Trust Fund to be treated as a taxable
mortgage pool under section 7701(i) of the Code. These restrictions on
transfers of Class X and Class N Certificates set forth in this Section 5.02
shall cease to apply (and the applicable portions of any legend on a Class X
or Class N Certificate may be deleted) with respect to transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of
Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the
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elimination of such restrictions will not cause the Trust Fund to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax or tax reporting obligation on the Trust Fund, a
Certificateholder or another Person.
(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 cancelled 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, and the Certificate
Registrar shall 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 Certificate
Registrar, any Paying Agent or the Trustee 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 4.02 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.
The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and 4.02 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 3.05 and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly
existing under the laws of the United States of
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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 and the Rating Agencies. The Trustee
as Paying Agent shall be subject to the same standards of care, limitations on
liability and rights to indemnity as the Trustee, and the provisions of
Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the
Paying Agent to the same extent as they apply to the Trustee. Any Paying Agent
appointed in accordance with this Section 5.02(a) may at any time resign by
giving at least 30 days' advance written notice of resignation to the Trustee,
the Servicer and the Depositor, such resignation to become effective upon
appointment of a successor Paying Agent.
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Seller, the Servicer and the
Depositor.
The Seller and the Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Seller or Servicer, as the case may be, 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 Seller, the Servicer or the Depositor.
Any entity into which the Seller, the Servicer or the Depositor may
be merged or consolidated, or any entity resulting from any merger, conversion
or consolidation to which the Seller, the Servicer or the Depositor shall be a
party, or any corporation succeeding to the business of the Seller, the
Servicer or the Depositor, shall be the successor of the Seller, 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 nor any of the directors or officers or
employees or agents of the Servicer 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 in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of duties of the Servicer or by reason of its
reckless disregard of its obligations and duties of the Servicer 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
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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 any director or officer or employee or agent of
the Servicer 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 incurred by reason of its willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer 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, 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 pay such expenses from the proceeds of the Trust or to be
reimbursed therefor pursuant to Section 3.05 upon presentation to the Trustee
of documentation of such expenses, costs and liabilities. 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.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it or its subsidiaries or Affiliates, the other activities of
the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Trustee in writing and such
proposed successor servicer is reasonably acceptable to the Trustee; and (b)
each Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor servicer stating that the proposed appointment of
such successor servicer as Servicer hereunder will not result in the reduction
or withdrawal of the then current rating of the Regular Certificates or the
ratings that are in effect; provided, however, that no such resignation by the
Servicer shall become effective until such successor servicer or, in the case
of (i) above, the Trustee shall have assumed the Servicer's responsibilities
and obligations hereunder or the Trustee shall have designated a successor
servicer in accordance with Section 7.02. Any such resignation shall not
relieve the Servicer of responsibility for any of the obligations specified in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer. Any such determination permitting the resignation
of the Servicer pursuant to clause (i) above shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee.
The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all the Servicer's right, title and
interest in, to and under this
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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 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) and agrees to be subject to the
terms of this Agreement. If, pursuant to any provision hereof, the duties of
the Servicer are transferred to a successor, the entire amount of the
Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor.
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. The Servicer shall provide the Trustee and the Rating Agencies
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.
ARTICLE VII
SERVICER EVENTS OF TERMINATION
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 by any Holder 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 by any Holder of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
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(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises
for the appointment of a trustee, conservator, receiver or liquidator in
any insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of
or relating to all or substantially all of its property; or a decree or
order of a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors or voluntarily suspend payment of its obligations; or
(v) The aggregate amount of cumulative Realized Losses incurred
since the Cut-off Date through the last day of the related Collection
Period divided by the initial Pool Balance exceeds the applicable
percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
May 2005 through April 2006 2.75%
May 2006 through April 2007 3.75%
May 2007 through April 2008 4.50%
May 2008 and thereafter 5.00%
(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 2:00 P.M., New York time, on the Business Day immediately following
the Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a
successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor 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
Seller. On or after the receipt by the Servicer (and by the Trustee if such
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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,
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
Escrow 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
servicing 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.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer and the Trustee 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. 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 or the ratings that are
in effect 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, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the
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Trustee and such successor shall agree, not to exceed the Servicing Fee). The
successor servicer shall be entitled to withdraw from the Collection Account
all costs and expenses associated with the transfer of the servicing to the
successor servicer. 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 3.12 or to indemnify the parties
indicated in Section 3.26 pursuant to the terms thereof, 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.
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 Servicing Rights Pledgee or its
designee shall be appointed 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) and the Servicing Rights
Pledgee agrees to be subject to the terms of this Agreement.
(b) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive a default in making a required distribution
on a Certificate without the consent of the Holder of such Certificate. Upon
any waiver of a past default, such default shall cease to exist and any
Servicer Event of Termination arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived. Notice of any such waiver shall be given by
the Trustee to the Rating Agencies.
Section 7.04 Notification to Certificateholders.
(a) On any termination or appointment of a successor 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.
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(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. Such notice shall be given to the Rating Agencies
promptly after any such occurrence.
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.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge 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
actual 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 person would exercise or use under the
circumstances in the conduct of such person's 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 that Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer, the Seller or the Depositor hereunder.
If any such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the
Certificateholders of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.
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
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obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee
unless it shall be proved that the Trustee was negligent in ascertaining
or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Majority Certificateholders relating
to the time, method and place of conducting any 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 or any Servicer Event of
Termination 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 Servicer or the Majority
Certificateholders. In the absence of such receipt of such notice, the
Trustee may conclusively assume that there is no Servicer Event of
Termination.
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.
The Trustee shall not have any duty (A) to see any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the Trust
Fund other than from funds available in the Distribution Account.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
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(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officer's
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;
(ii) the Trustee may consult with counsel and any advice or 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 advice or Opinion of Counsel;
(iii) the Trustee shall not be under any 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 the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
the right of the Trustee to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and the Trustee shall
not be answerable for other than its negligence or willful misconduct in
the performance of any such act;
(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 Certificateholders; 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. 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 any liability
or make any 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;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys or a custodian
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and the Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed by it with
due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for
the use or application by the 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 not
at any 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 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), 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), taken in the name
of the Trustee; the failure of the 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. The Trustee shall not have any
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder.
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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
Seller, the Servicer, the Depositor or their Affiliates.
Section 8.05 Seller to Pay Trustee Fees and Expenses.
The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself its fees in an aggregate amount equal to
the Trustee Fee pursuant to Section 4.01(a) and (b), to the extent the Group 1
Interest Remittance Amount and the Group 2 Interest Remittance Amount are at
any time insufficient for such purpose, the Seller shall pay such fees as
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee, and the Seller will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from such party's negligence or bad faith
or which is the responsibility of Certificateholder or the Trustee.
Notwithstanding any other provision of this Agreement, including Section
2.03(a) and Section 2.04, to the contrary, the Seller covenants and agrees to
indemnify the Trustee and its officers, directors, employees and agents from,
and hold each of them harmless against, any and all losses, liabilities,
damages, claims or expenses incurred in connection with any legal action
relating to this Agreement, the Certificates or incurred in connection with
the administration of the Trust, other than with respect to a party, any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence of such party in the performance of its duties hereunder or by
reason of such party's reckless disregard of obligations and duties hereunder.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Trustee be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action. The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified, to the extent not paid
by the Seller pursuant to this Section, by the Trust Fund and held harmless
against any loss, liability or expense (not including expenses, disbursements
and advances incurred or made by the Trustee, in the ordinary course of the
Trustee's performance in accordance with the provisions of this Agreement)
incurred by the Trustee, or such party arising out of or in connection with
the acceptance or administration of its duties under this Agreement, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance by the Trustee of its duties under
this Agreement or by reason of the reckless disregard of the Trustee's
obligations and duties under this Agreement. This section shall survive
termination of this Agreement or the resignation or removal of any Trustee
hereunder.
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Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a Department of Housing
and Urban Development and Federal Housing Administration approved mortgagee,
an entity duly organized and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P and a
long term debt rating of at least A1 or better by ▇▇▇▇▇'▇, 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 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.
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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 Rating Agencies, the
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the
Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each
Rating Agency.
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
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co-trustee or separate trustee shall be subject to the written approval of the
Servicer. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, or in the case a Servicer
Event of Termination shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 8.06, and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 8.08. The Servicer shall be responsible for the fees of any co-trustee
or separate trustee appointed hereunder.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(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, the Rating Agencies 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
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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 this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the
Certificates is made and intended not as a personal undertaking or agreement
by the Trustee but is made and intended for the purpose of binding only the
Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee for the benefit
of all Holders of such Certificates, subject to the provisions of this
Agreement. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the
Certificateholders in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable 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. 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 at the expense of the party requesting such copies, 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 Seller hereunder shall occur and be continuing, the Trustee
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.
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Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Compliance with National Housing Act of 1934.
In performing its duties hereunder with respect to FHA Loans, the
Trustee shall comply with all requirements of the National Housing Act of
1934, as amended.
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall make or cause to be made REMIC elections for
each REMIC designated as such in the Preliminary Statement on Forms 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 Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Servicer in fulfilling its
duties hereunder. The Servicer shall be entitled to reimbursement of expenses
to the extent provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare or cause to be prepared and shall file
or cause to be filed, each REMIC's federal and state tax and information
returns as such REMIC's direct representative. The expenses of preparing and
filing such returns shall be borne by the Trustee.
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(e) The Holder of the Residual Certificates with respect to each
REMIC holding the largest Percentage Interest shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person") with
respect to the applicable REMIC or REMICs, and the Trustee is irrevocably
designated as and shall act as attorney-in-fact and agent for such Tax Matters
Person for each REMIC. The Trustee, as agent for the Tax Matters Person, shall
perform, on behalf of each REMIC, all reporting and other tax compliance
duties that are the responsibility of such REMIC under the Code, the REMIC
Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties, if
required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate
to any disqualified person or organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Servicer, and the Holders of Certificates shall
take any action or cause any REMIC to take any action necessary to create or
maintain the status of such 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 or cause any REMIC 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 such action or failure to act is expressly permitted under the terms of
this Agreement or 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 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 such
REMIC, and no such Person shall take any such action or cause such 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 its pro
rata share of any and all taxes imposed on any REMIC by federal or state
governmental authorities. To the extent that such REMIC taxes are not paid by
Residual Certificateholders, the Trustee shall pay any remaining REMIC taxes
out of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in each REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to Holders of the REMIC Regular Interests or the
Certificates, as the case may be.
(h) The Trustee, shall, for federal income tax purposes, maintain or
cause to be maintained books and records with respect to each REMIC on a
calendar year and on an accrual basis.
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(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 2003,
the Servicer shall deliver to the Trustee and each Rating Agency an Officer's
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee shall treat the rights of the Offered P&I
Certificates and the Class B-2 and Class B-3 Certificates to receive Net Rate
Carryover Amounts as a right in interest rate cap contracts written by the
Holders of the Class X and Class N Certificates in favor of the Holders of the
Offered P&I Certificates and the Class B-2 and Class B-3 Certificates, and the
Trustee shall account for such as property held separate and apart from the
regular interests it holds in each of the REMICs created hereunder. This
provision is intended to satisfy the requirements of Treasury Regulations
Section 1.860G-2(i) for the treatment of property rights coupled with regular
interests to be separately respected and shall be interpreted consistent with
such regulation. On each Distribution Date, to the extent the Offered P&I
Certificates and the Class B-2 and Class B-3 Certificates receive interest in
excess of the applicable Net Rate Cap, such interest will be treated as
distributed to the Class X and Class N Certificates in respect of interest on
the Class 3-X Interest and then paid to the respective Class of Offered P&I
Certificates and Class B-2 and Class B-3 Certificates pursuant to the related
interest rate cap agreement.
(m) [RESERVED]
(n) In the event that any Person holds pro rata shares of the
ownership of the Class N Certificates and the Class X Certificates (any such
Person, a "Proportionate Holder"), the Trustee shall treat such Person as the
holder of the ownership of the same pro-rata share of the Class X-N Interest.
In the event that any Person holds non-pro rata shares of the ownership of the
Class N Certificates and the Class X Certificates (any such Person, a
"Disproportionate Holder"), the Trustee shall treat such Person, and all other
Disproportionate Holders, as partners in a partnership that owns the Class X-N
Interest (other than the shares of the Class X-N Interest held by any
Proportionate Holders) for federal income tax purposes and shall not treat the
Class N and Class X Certificates held by the Disproportionate Holders as
interests in any REMIC created hereunder. By acquiring the Class N
Certificates and the Class X Certificates, the respective Holders will agree
to treat the Class N Certificates and the Class X Certificates in the manner
described in the preceding sentences for federal income tax purposes. In such
event, (i) a separate capital account shall be established and maintained for
each Holder of a Class N or Class X Certificate in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv), which shall be credited with income or
gain and debited by any expenses or losses and distributions allocable to such
Certificates, (ii) the Class N Certificates shall be allocated income in an
amount equal to interest at the Pass-Through Rate thereon and any original
issue discount that would be reportable thereon if the Class N Certificate
were a debt instrument issued on the date ownership of the Class N and Class X
Certificates is separated, with a principal balance equal to its Notional
Amount, (iii) the Class X and Class N Certificates shall be allocated income
with
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respect to all prepayment penalties (including amounts in connection with the
full or partial waiver of such prepayment penalties or premiums pursuant to
Section 3.01) in accordance with the allocation of such amounts pursuant to
Section 4.02(c), to the extent not allocated pursuant to Section 9.01(n)(ii)
above, (iv) the Class X and Class N Certificates shall be allocated accruals
(under any reasonable method) of any "cap premiums" deemed received on the
date ownership of the Class X and Class N Certificates is separated in respect
of the obligation of the Class X-N Interest to pay Net Rate Carryover Amounts,
and shall be allocated expense in respect of any actual payment of such Net
Rate Carryover Amounts based on which one of such Classes economically bears
such expense, (v) the Class X Certificates shall be allocated all remaining
income and any expenses and Realized Losses with respect to the Class X-N
Interest, until the capital account of the Class X Certificates is reduced to
zero, and any remaining expenses or losses shall be allocated to the Class N
Certificates, (vi) neither the Class N Certificates nor the Class X
Certificates shall be responsible for restoring any deficit to its capital
account, (vii) upon termination of the Trust Fund pursuant to Article X, all
amounts available for distribution to Holders of the Class N and Class X
Certificates shall be distributed in accordance with their positive capital
account balances, first to the Class N Certificates until their Notional
Amount and any accrued but unpaid interest thereon are reduced to zero, and
then to the Class X Certificates, and (viii) the Trustee shall maintain books
and records with respect to the partnership on a calendar year basis (unless a
different taxable year shall be required by the Code) and shall prepare or
cause to be prepared, and cause the Holder of the largest Percentage Interest
of the Class X Certificates to sign and file or cause to be filed all federal
and state tax and information returns for the partnership, and shall furnish
or cause to be furnished Schedule K-1's to the Holders of the Class N and
Class X Certificates at the time required by the Code. Unless otherwise
directed by a majority of the Percentage Interests of the Class X and Class N
Certificates, the Trustee shall not make an election under Section 754 of the
Code. The Holder of the largest Percentage Interest of the Class X
Certificates, by acceptance of its Class X Certificate, agrees to act as "tax
matters partner" (within the meaning of Section 6231(a)(7) of the Code and to
sign and timely file all federal and state partnership tax and information
returns prepared by the Trustee pursuant to this Section 9.01(n).
(o) The Trustee shall treat the Basis Risk Reserve Fund and the
Interest Rate Cap Agreements as outside reserve funds within the meaning of
Treasury Regulation 1.860G-2(h) that are owned by the Class X and Class N
Certificateholders and that are not assets of the REMICs. The Trustee shall
treat the rights of the Class 1-A1, Class 2-A1, Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class
M-2F, Class B-1, Class B-2 and Class B-3 Certificateholders to receive
payments from the Basis Risk Reserve Fund and (except with respect to the
Class B-2 and Class B-3 Certificatesholders) the Interest Rate Cap Agreements
as rights in interest rate cap contracts written by the Holders of the Class
X-N Interest (in the case of amounts payable from the Basis Risk Reserve Fund)
and the Seller (in the case of amounts payable from the Interest Rate Cap
Account), in each case in favor of the Class 1-A1, Class 2-A1, Class ▇-▇,
▇▇▇▇▇ ▇-▇▇, Class M-2F, and Class B-1 Certificateholders, and only with
respect to the amounts payable from the Basis Risk Reserve Fund, the Class B-2
and Class B-3 Certificateholders. Thus, each Certificate other than the Class
A-IO, Class X and Class N Certificates shall be treated as representing
ownership of not only REMIC Regular Interests, but also ownership of an
interest in one or more interest rate cap contracts. For purposes of
determining the issue price of the REMIC Regular Interests, the Trustee shall
assume that the Interest Rate Cap Agreements have a value of 4.5 basis points.
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Section 9.02 Prohibited Transactions and Activities.
Neither the Seller, 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 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 any 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 such
REMIC 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 such REMIC 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.
In the event that any REMIC formed hereunder 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
Holder of the related Residual Certificate against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Servicer have
any liability (1) for any action or omission that is taken in accordance with
and in compliance with the express terms of, or which is expressly permitted
by the terms of, this Agreement, (2) for any Losses other than arising out of
a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC with respect to
any REO Property which might 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 REMIC of any "income from non-permitted assets"
within the meaning of
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section 860F(a)(2) of the Code or any "net income from foreclosure property"
which is subject to tax under the REMIC Provisions unless the Servicer has
advised, or has caused the applicable Servicer to advise, the Trustee in
writing to the effect that, under the REMIC Provisions, such action would not
adversely affect the status of any REMIC as a REMIC and any income generated
for such REMIC by the REO Property would not result in the imposition of a tax
upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service
to the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC may hold REO Property
for a longer period without adversely affecting its REMIC status or causing
the imposition of a Federal or state tax upon any REMIC. If the Servicer has
received such an extension, then the Servicer shall continue to attempt to
sell the REO Property for its fair market value as determined in good faith by
the Servicer for such longer period as such extension permits (the "Extended
Period"). If the Servicer has not received such an extension and the Servicer
is unable to sell the REO Property within 33 months after its acquisition by
the Trust Fund or if the Servicer has received such an extension, and the
Servicer is unable to sell the REO Property within the period ending three
months before the close of the Extended Period, the Servicer shall, before the
end of the applicable period, (i) purchase such REO Property at a price equal
to the REO Property's fair market value as determined in good faith by the
Servicer or (ii) auction the REO Property to the highest bidder (which may be
the Servicer) in an auction reasonably designed to produce a fair price prior
to the expiration of the applicable period.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Seller,
the Servicer, the Depositor, the Trustee and the Certificate Registrar (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 Balance of each Class of Certificates has been
reduced to zero, (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust, and (iii) the optional purchase by the Servicer of
the Mortgage Loans as described below. 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 Servicer may, at its option, terminate the Mortgage Loans in the
Trust Fund and retire the Certificates on the next succeeding Distribution
Date upon which the aggregate current Pool Balance is less than 10% of the
aggregate Pool Balance of the Mortgage Loans as of
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the Cut-off Date by purchasing all of the outstanding (i) Mortgage Loans in
the Trust Fund at a price equal to the sum of the outstanding Principal
Balance of the Mortgage Loans and except to the extent previously advanced by
the Servicer, accrued and unpaid interest thereon at the weighted average of
the Mortgage Interest Rates through the end of the Collection Period preceding
the final Distribution Date plus unreimbursed Servicing Advances, Advances and
any unpaid Servicing Fees allocable to such Mortgage Loans and (ii) REO
Properties in the Trust Fund at a price equal to their fair market value as
determined in good faith by the Servicer (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account
(less amounts permitted to be withdrawn by the Servicer pursuant to Section
3.07), which deposit shall be deemed to have occurred immediately following
such purchase.
Any such purchase shall be accomplished by delivery to the Trustee
for deposit into the Distribution Account as part of Available Funds 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 Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day of
the month preceding the month of such final distribution and not later than
the 15th day of 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 Sections 4.01 and 4.02 for
such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow 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
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distribution with respect thereto. If within nine months after the second
notice all the Certificates shall not have been surrendered for cancellation,
the Class R-1 Certificateholders shall be entitled to all unclaimed funds and
other assets which remain subject hereto (except with respect to the Class
B-2, Class B-3, Class N and Class X Certificates and the assets of the Class
B-2 REMIC, the Class B-3 REMIC and the Class X-N REMIC) and the Trustee upon
transfer of such funds shall be discharged of any responsibility for such
funds, and such Certificateholders shall look to the Class R-1
Certificateholders for payment. The Class R-2 Certificateholders shall be
entitled to all unclaimed funds and other assets with respect to the Class B-2
REMIC, the Class B-3 REMIC and the Class X-N REMIC. Holders of the Class B-2
Certificates (representing beneficial ownership of the Class B-2 Regular
Interest), the Class B-3 Certificates (representing beneficial ownership of
the Class B-3 Regular Interest) and Class N and Class X Certificates
(representing partners in a partnership which beneficially owns the Class X-N
REMIC Regular Interest) shall be entitled to look only to the Class R-2
Certificateholder for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the Servicer exercises its purchase option as
provided in Section 10.01, the Trust 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) The Trustee shall designate a date within 90 days prior to the
final Distribution Date as the date of adoption of plans of complete
liquidation of each of the Master REMIC, the Intermediate REMIC, the
Subsidiary REMIC, the Class B-2 REMIC, the Class B-3 REMIC and the Class
X-N REMIC and shall specify such date in the final federal income tax
return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited in the following order of priority (A) (i) to the
Holders of each of the Class 1-A1 and Class 2-A1 Certificates, pro rata
and (ii) to the Class ▇-▇, ▇▇▇▇▇ ▇-▇▇, Class M-2F, Class B-1, Class B-2
and Class B-3 Certificates, the related Certificate Principal Balance, as
applicable, plus one month's interest thereon at the applicable
Pass-Through Rate, (B) to the Class N and Class X Certificates in respect
of the Class X-N Interest, the amount of any remaining Monthly Excess
Cash Flow Amounts not previously distributed thereon, (C) to the
remaining REMIC Regular Interests the amounts allocable thereto pursuant
to Section 4.08 and (D) to the Class R Certificateholders, all cash on
hand in respect of the related REMIC or REMICs after such payment (other
than cash retained to meet claims) and the Trust shall terminate at such
time.
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(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
(c) Notwithstanding any other provision of this Agreement, the Class
B-2 REMIC and the Class B-3 REMIC will terminate on the last Distribution Date
on which the Class B-2 Certificates or the Class B-3 Certificates,
respectively, are entitled to distributions pursuant to this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Seller, 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 or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
any such action listed in clause (i) through (iii) above shall not adversely
affect in any respect the interests of any Certificateholder, as evidenced by
(i) notice in writing to the Depositor, the Servicer and the Trustee from the
Rating Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class of Certificates with respect
to which it is a Rating Agency, or (ii) an Opinion of Counsel delivered to the
Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by
Seller, 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
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than
as described in clause (x) above, without the consent of the Holders of
Certificates of such Class evidencing at least a 66% Percentage Interest in
such Class, or (z) reduce the percentage of Voting Rights required by clause
(y) above without the consent of the Holders of all Certificates of such Class
then outstanding. Upon approval of an amendment, a copy of such amendment
shall be sent to the Rating Agencies. Prior to the execution of any amendment
to this Agreement, the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel (at the expense of the Person seeking such amendment)
stating that the execution of such amendment is authorized or permitted by
this Agreement. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement.
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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 constituting part of the
Trust Fund pursuant to the REMIC Provisions or cause any REMIC 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 Seller or 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.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute
but one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up of
the Trust, or (iii) otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to
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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 herein 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, or by express delivery service,
to (a) in the case of the Seller, Credit-Based Asset Servicing and
Securitization LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
Attention: Director - Mortgage Finance (telecopy number (▇▇▇) ▇▇▇-▇▇▇▇), or
such other address or telecopy number as may hereafter be furnished to the
Depositor and the Trustee and in writing by the Seller, (b) in the case of the
Trustee, JPMorgan ▇▇▇▇▇ ▇▇▇▇, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
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▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Institutional Trust
Services--C-BASS 2002-CB6, or such other address as may hereafter be furnished
to the Depositor, the Seller and the Servicer in writing by the Trustee, (c)
in the case of the Depositor, Financial Asset Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6, or such other address as may be
furnished to the Seller, the Servicer and the Trustee in writing by the
Depositor, and (d) in the case of the Servicer, ▇▇▇▇▇▇ Loan Servicing LP, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such
other address as may be furnished to the Seller, the Depositor and the Trustee
in writing by the Servicer. 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 the 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
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(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.
(vii) In addition, the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(A) each annual statement as to compliance described in Section
3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof; and
(C) 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
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Managing Director, Residential Mortgage-Backed Securities; Fitch
Ratings, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Managing
Director, Residential Mortgage-Backed Securities; and Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: 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, the Seller
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
-146-
appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Whenever such execution is by a signer acting in a capacity other than his or
her individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of 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.
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IN WITNESS WHEREOF, the Seller, 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: Senior Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ LOAN SERVICING LP, as Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
JPMORGAN CHASE BANK, not in its
individual capacity but solely as Trustee for the
2002-CB6 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
-148-
STATE OF CONNECTICUT )
) ss.:
COUNTY OF FAIRFIELD )
On the 23rd day of December, 2002 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be the Senior
Vice President of Financial Asset Securities Corp., a Delaware corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
[SEAL]
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of December, 2002 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ known to me to be a
Vice President of Credit-Based Asset Servicing and Securitization LLC, a
limited liability company that executed the within instrument, and also known
to me to be the person who executed it on behalf of said limited liability
company, and acknowledged to me that such limited liability company 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/ ▇▇▇▇▇▇ ▇▇▇
--------------
[SEAL]
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 23rd day of December, 2002 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, known to me to be a Vice
President of JPMorgan Chase Bank, a New York banking corporation 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/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
[SEAL]
Notary Public
STATE OF TEXAS )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 23rd day of December, 2002 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 Delaware limited partnership,
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited partnership, and acknowledged to me that
such limited partnership 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/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
[SEAL]
Notary Public
EXHIBIT 1-A1
[FORM OF THE CLASS 1-A1 CERTIFICATE]
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. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : 1-A1
Assumed Maturity Date : [___]
A-1-1
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class 1-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 and second lien 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
1-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 1-A1 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, 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 1-A1 Certificate (obtained by
dividing the Denomination of this Class 1-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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class 1-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 1-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 1-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 1-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 __, 2002
By: JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class 1-A1 Certificates
referenced in the within-mentioned Agreement
By ________________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
A-1-3
[Reverse of Class 1-A1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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 upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
A-1-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________________________________
____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
A-1-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
_______________________________________________________________________________
for the account of____________________________________________________________,
account number __________________, or, if mailed by check, to _________________
_______________________________________________________________________________
Applicable statements should be mailed to _____________________________________
_____________________________________________________________________________.
This information is provided by _____________________________________,
the assignee named above, or _________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF THE CLASS 2-A1 CERTIFICATE]
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").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
A-2-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : 2-A1
Assumed Maturity Date : [___]
A-2-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class 2-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 and second lien 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
2-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 2-A1 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, 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 2-A1 Certificate (obtained by
dividing the Denomination of this Class 2-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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class 2-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 2-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 2-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 2-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-2-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class 2-A1 Certificates
referenced in the within-mentioned Agreement
By _______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
A-2-4
[Reverse of Class 2-A1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time, with the consent of the Certificate Insurer, by the Depositor, the
Seller, the Servicer and the Trustee with the consent 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-2-5
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________________________________
___________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated: _____________
______________________________________
Signature by or on behalf of assignor
A-2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________
______________________________________________________________________________
for the account of___________________________________________________________,
account number _________________, or, if mailed by check, to ________________
______________________________________________________________________________
Applicable statements should be mailed to ____________________________________
_____________________________________________________________________________.
This information is provided by ____________________________________,
the assignee named above, or ________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF THE CLASS 3-F1 CERTIFICATE]
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").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
A-3-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : 3-F1
Assumed Maturity Date : [___]
A-3-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class 3-F1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien 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
3-F1 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class 3-F1 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, 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 3-F1 Certificate (obtained by
dividing the Denomination of this Class 3-F1 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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class 3-F1
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class 3-F1
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 3-F1
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 3-F1 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-3-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By ____________________________________
This is one of the Class 3-F1 Certificates
referenced in the within-mentioned Agreement
By _____________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
A-3-4
[Reverse of Class 3-F1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time, with the consent of the Certificate Insurer, by the Depositor, the
Seller, the Servicer and the Trustee with the consent 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-3-5
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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-3-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated: _____________
__________________________________________
Signature by or on behalf of assignor
A-3-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________
______________________________________________________________________________
for the account of___________________________________________________________,
account number _________________, or, if mailed by check, to _________________
______________________________________________________________________________
Applicable statements should be mailed to ____________________________________
_____________________________________________________________________________.
This information is provided by ____________________________________,
the assignee named above, or ________________________________________________,
as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF THE CLASS A-IO CERTIFICATE]
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 REPRESENTS
OWNERSHIP OF 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 (THE "CODE").
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Notional Amount
of this Certificate
("Denomination") : $[___]
Original Class Notional
Amount of this Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : A-IO
Assumed Maturity Date : [___]
A-4-1
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class A-IO
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class A-IO Certificate does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the
Servicer, or the Trustee referred to below or any of their respective
affiliates.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Class A-IO Certificate (obtained by
dividing the Denomination of this Class A-IO Certificate by the Original Class
A-IO Notional Amount) 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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class A-IO
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A-IO
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class A-IO
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class A-IO 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 __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class A-IO Certificates
referenced in the within-mentioned Agreement
By ______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
A-4-3
[Reverse of Class A-IO Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
A-4-4
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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, address including postal zip code, and
Taxpayer Identification Number of assignee)___________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
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 B-1 CERTIFICATE]
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 (THE "CODE").
THIS CLASS B-1 CERTIFICATE IS SUBORDINATE TO THE CLASS 1-A1, CLASS 2-A1, CLASS
3-F1, CLASS ▇-▇, ▇▇▇▇▇ ▇-▇▇, AND CLASS M-2F. CERTIFICATES OF THIS SERIES TO
THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
B-1-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : B-1
Assumed Maturity Date : [___]
B-1-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class B-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 and second lien 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-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 B-1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, 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-1 Certificate (obtained by
dividing the Denomination of this Class B-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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-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 B-1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-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 B-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.
B-1-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class B-1 Certificates
referenced in the within-mentioned Agreement
By ______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
B-1-4
[Reverse of Class B-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
B-1-5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
B-1-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a
new Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
______________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
B-1-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
______________________________________________________________________________
for the account of _________________, account number ________________________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to _____________________________________
This information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS B-2 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 (THE "CODE").
THIS CLASS B-2 CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CLASS B-2 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
B-2-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : B-2
Assumed Maturity Date : [___]
B-2-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class B-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 and second lien 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-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 B-2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that _____________________________ is the registered
owner of the Percentage Interest evidenced by this Class B-2 Certificate
(obtained by dividing the Denomination of this Class B-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 the Cut-off Date
specified above (the "Agreement") among the Depositor, Credit-Based Asset
Servicing and Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan
Servicing LP, as Servicer (the "Servicer"), and JPMorgan Chase Bank, as
Trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class B-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 B-2
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class B-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 B-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.
B-2-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class B-2 Certificates
referenced in the within-mentioned Agreement
By _________________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
B-2-4
[Reverse of Class B-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
B-2-5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
B-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto __________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) _________________________________
_____________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ___________________________________
_______________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
B-2-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
______________________________________________________________________________
for the account of ___________________, account number ______________________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLASS B-3 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 (THE "CODE").
THIS CLASS B-3 CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CLASS B-3 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
B-3-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : B-3
Assumed Maturity Date : [___]
B-3-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class B-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 and second lien 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-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 B-3 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that _____________________________ is the registered
owner of the Percentage Interest evidenced by this Class B-3 Certificate
(obtained by dividing the Denomination of this Class B-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 the Cut-off Date
specified above (the "Agreement") among the Depositor, Credit-Based Asset
Servicing and Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan
Servicing LP, as Servicer (the "Servicer"), and JPMorgan Chase Bank, as
Trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class B-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 B-3
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class B-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 B-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.
B-3-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class B-3 Certificates
referenced in the within-mentioned Agreement
By _______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
B-3-4
[Reverse of Class B-3 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
B-3-5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
B-3-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) _________________________________
_____________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:_____________________________________
_______________________________________________________________________________
Dated:
______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
B-3-7
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.
B-3-8
EXHIBIT C-1-I
[FORM OF CLASS R-1 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-1 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.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-1-I-1
Certificate No. [___]
Percentage Interest: [___]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class R-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 and second lien mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class R-1 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that _______________________________ is the registered
owner of the Percentage Interest evidenced by this Class R-1 Certificate 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 the Cut-off Date specified above (the "Agreement") among
the Depositor, Credit-Based Asset Servicing and Securitization LLC, as Seller
(the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as Servicer (the "Servicer"), and
JPMorgan Chase Bank, as Trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class R-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 R-1 Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class R-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 R-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.
C-1-I-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but solely as Trustee
By ___________________________
This is one of the Class R-1 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-1-I-3
[Reverse of Class R-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
C-1-I-4
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.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
C-1-I-5
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.
C-1-I-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto______________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated: _____________
______________________________________
Signature by or on behalf of assignor
C-1-I-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.
C-1-I-8
EXHIBIT C-1-II
[FORM OF CLASS R-2 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-2 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.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-1-II-1
Certificate [___]
Percentage Interest: [___]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class R-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 and second lien mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class R-2 Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that ______________________________ is the registered
owner of the Percentage Interest evidenced by this Class R-2 Certificate 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 the Cut-off Date specified above (the "Agreement") among
the Depositor, Credit-Based Asset Servicing and Securitization LLC, as Seller
(the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as Servicer (the "Servicer"), and
JPMorgan Chase Bank, as Trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class R-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 R-2 Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class R-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 R-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.
C-1-II-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but solely as Trustee
By ___________________________
This is one of the Class R-2 Certificates
referenced in the within-mentioned Agreement
By _____________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-1-II-3
[Reverse of Class R-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
C-1-II-4
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.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
C-1-II-5
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.
C-1-II-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
___________________________________________________________________________
Dated: _____________
______________________________________
Signature by or on behalf of assignor
C-1-II-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.
C-1-II-8
EXHIBIT C-2
[FORM OF CLASS M-1 CERTIFICATE]
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 (THE "CODE").
THIS CLASS M-1 CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-2-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : M-1
Assumed Maturity Date : [___]
C-2-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
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 and second lien 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 Seller, 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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-2-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By ___________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement
By _______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-2-4
[Reverse of Class M-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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.
C-2-5
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
C-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)___________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
C-2-7
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.
C-2-8
EXHIBIT C-3
[FORM OF CLASS M-2V CERTIFICATE]
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 (THE "CODE").
THIS CLASS M-2V CERTIFICATE IS SUBORDINATE TO THE CLASS 1-A1, CLASS 2-A1,
CLASS 3-F1 AND CLASS M-1 CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED
HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-3-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : M-2V
Assumed Maturity Date : [___]
C-3-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class M-2V
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien 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-2V 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-2V Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, 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-2V Certificate (obtained by
dividing the Denomination of this Class M-2V 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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-2V
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-2V
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class M-2V
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-2V 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.
C-3-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class M-2V Certificates
referenced in the within-mentioned Agreement
By _____________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-3-4
[Reverse of Class M-2V Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this
C-3-5
Certificate for registration of transfer at the office or agency maintained
by the Trustee in New York, New York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
C-3-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_____________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:
_____________________________________________________________________________.
Dated:
______________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
C-3-7
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.
C-3-8
EXHIBIT C-4
[FORM OF CLASS M-2F CERTIFICATE]
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 (THE "CODE").
THIS CLASS M-2F CERTIFICATE IS SUBORDINATE TO THE CLASS 1-A1, CLASS 2-A1,
CLASS 3-F1, CLASS M-1 AND CLASS M-2V CERTIFICATES OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-4-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $[___]
Original Class Certificate
Principal Balance of this
Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : M-2F
Assumed Maturity Date : [___]
C-4-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class M-2F
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien 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-2F 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-2F Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, 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-2F Certificate (obtained by
dividing the Denomination of this Class M-2F 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 the Cut-off Date specified above
(the "Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan Servicing LP, as
Servicer (the "Servicer"), and JPMorgan Chase Bank, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-2F
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-2F
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class M-2F
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-2F 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.
C-4-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class M-2F Certificates
referenced in the within-mentioned Agreement
By _______________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-4-4
[Reverse of Class M-2F Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this
C-4-5
Certificate for registration of transfer at the office or agency maintained by
the Trustee in New York, New York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
C-4-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
____________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on
the Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and
deliver such Certificate to the following address:
______________________________________________________________________________.
Dated:
______________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
C-4-7
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.
C-4-8
EXHIBIT C-5
[FORM OF CLASS X 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 (THE "CODE").
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES AND THE
CLASS B-2, CLASS B-3 AND CLASS N CERTIFICATES TO THE EXTENT DESCRIBED HEREIN
AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.
C-5-1
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : X
Assumed Maturity Date : [___]
C-5-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class X
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class X Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that ________________________________ is the
registered owner of the Percentage Interest evidenced by this Class X
Certificate obtained by dividing the Denomination of this Class X 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
the Cut-off Date specified above (the "Agreement") among the Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
▇▇▇▇▇▇ Loan Servicing LP, as Servicer (the "Servicer"), and JPMorgan Chase
Bank, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Class X Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class X 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 X
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 X 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.
C-5-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class X Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-5-4
[Reverse of Class X Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
C-5-5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
C-5-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) _________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:___________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
C-5-7
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.
C-5-8
EXHIBIT C-6
[FORM OF CLASS N CERTIFICATES]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF 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 (THE "CODE").
THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES AND THE
CLASS B-2 CERTIFICATES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, NOR A
PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF
ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR THAT SUCH TRANSFEREE
IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNTS" AS SUCH TERM IS DEFINED IN SECTION
V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60"), AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTION I AND
III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS
OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE
CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE
C-6-1
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID
AND OF NO EFFECT.
NO TRANSFER OF A CLASS N CERTIFICATE SHALL BE MADE, AND ANY ATTEMPTED OR
PURPORTED TRANSFER OF A CLASS N CERTIFICATE SHALL BE ABSOLUTELY NULL AND VOID
AND SHALL VEST NO RIGHTS IN THE PURPORTED TRANSFEREE, IF THE PURPORTED
TRANSFEREE IS NOT A U.S. PERSON. NOTWITHSTANDING THE FOREGOING, A 100%
PERCENTAGE INTEREST IN THE CLASS N CERTIFICATE MAY BE TRANSFERRED TO A
NON-U.S. PERSON THAT IS, OR WILL BE AS OF THE DATE OF SUCH TRANSFER, THE
HOLDER OF CLASS X CERTIFICATES EVIDENCING A 100% PERCENTAGE INTEREST IN SUCH
CLASS. ANY HOLDER OF THE CLASS X CERTIFICATES THAT IS NON-U.S. PERSON AND THAT
ALSO IS A BENEFICIAL OWNER OF A 100% PERCENTAGE INTEREST IN THE CLASS N
CERTIFICATES, MAY NOT TRANSFER ANY PORTION OF THE CLASS X CERTIFICATES TO
ANOTHER PERSON AS LONG AS IT CONTINUES TO HOLD ANY INTEREST IN THE CLASS N
CERTIFICATES.
Certificate No. : [___]
Cut-off Date : [____]
First Distribution Date : [___]
Initial Notional Amount
of this Certificate
("Denomination") : $[___]
Original Class Notional
Amount of this Class : $[___]
Percentage Interest : [___]
Initial Pass-Through Rate : [___]
CUSIP : [___]
Class : N
Assumed Maturity Date : [___]
C-6-2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Class N
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first and second lien mortgage loans (the
"Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class N Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that _______________________________ is the registered
owner of the Percentage Interest evidenced by this Class N Certificate
(obtained by dividing the Denomination of this Class N Certificate by the
Original Class N Notional Amount) 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 the Cut-off Date
specified above (the "Agreement") among the Depositor, Credit-Based Asset
Servicing and Securitization LLC, as Seller (the "Seller"), ▇▇▇▇▇▇ Loan
Servicing LP, as Servicer (the "Servicer"), and JPMorgan Chase Bank, as
Trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class N
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class N
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 N
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 N 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.
C-6-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused
this Certificate to be duly executed.
Dated: December __, 2002
JPMORGAN CHASE BANK
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class N Certificates
referenced in the within-mentioned Agreement
By ____________________________________
Authorized Signatory of
JPMorgan Chase Bank, as Trustee
C-6-4
[Reverse of Class N Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS, Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(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 first Business Day following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face
hereof, to the Person in whose name this Certificate is registered at the
close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement.
Distributions on this Certificate shall be made by check or money
order mailed to the address of the person entitled thereto as it appears on
the Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent 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
C-6-5
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.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee in New York, New
York 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, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance
is less than 10% of the Pool Balance 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 the earlier of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero and (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust. In no event, however, will the trust created by
the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living at the date of the Agreement of a
certain person named in the Agreement.
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.
C-6-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:____________________________________
_______________________________.
Dated:_________
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
C-6-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________
______________________________________________________________________________
for the account of ________________, account number _________________________,
or, if mailed by check, to ___________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by ______________________________________________,
the assignee named above, or _______________________________, as its agent.
C-6-8
EXHIBIT D
MORTGAGE LOAN SCHEDULE
ON FILE WITH TRUSTEE
D-1
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Asset Backed Funding Corporation Series 2002-CB6
Re: Pooling and Servicing Agreement dated as of December 1, 2002 among
Financial Asset Securities Corp., as depositor, Credit-Based
Asset Servicing and Securitization LLC, as seller, ▇▇▇▇▇▇
Loan Servicing LP, as servicer and JPMorgan Chase Bank, as trustee.
-------------------------------------------------------
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced
above.
In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
E-1
_____ 5. Nonliquidation Reason:__________________________
By:____________________________
(authorized signer)
Issuer:________________________
Address:_______________________
_______________________________
Date:__________________________
Custodian
---------
The Bank of New York
Please acknowledge the execution of the above request by your signature and
date below:
_____________________________________ ________________________
Signature Date
Documents returned to Custodian:
_____________________________________ _______________________
Custodian Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of
December 1, 2002 among Financial Asset Securities
Corp., as depositor, Credit-Based Asset Servicing
and Securitization LLC, as seller, ▇▇▇▇▇▇ Loan
Servicing LP, as servicer and JPMorgan Chase Bank,
as trustee with respect to C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6
---------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that it received
confirmation from the Custodian that the Custodian has received the documents
listed in Section 2.01 of the Pooling and Servicing Agreement for each
Mortgage File pertaining to each Mortgage Loan listed on Schedule A, to the
Pooling and Servicing Agreement, subject to any exceptions noted on Schedule I
hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms
of Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
JPMORGAN CHASE BANK
as Trustee
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, 2002 among Financial Asset Securities
Corp., as depositor, Credit-Based Asset Servicing
and Securitization LLC, as seller, ▇▇▇▇▇▇ Loan
Servicing LP, as servicer and JPMorgan Chase Bank,
as trustee with respect to C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6
-----------------------------------------------------
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 received confirmation
from the Custodian that the 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 the Mortgage Loan
Schedule is correct.
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.
JPMORGAN CHASE BANK
as Trustee
By:________________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
---------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of December 1, 2002, among Financial Asset Securities Corp., as
depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and JPMorgan Chase Bank, as trustee (the
"Trustee"), we hereby acknowledge the receipt of the original Mortgage Note (a
copy of which is attached hereto as Exhibit 1) with any exceptions thereto
listed on Exhibit 2.
JPMORGAN CHASE BANK
as Trustee
By:___________________________________
Name:
Title:
F-3-1
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
SEE TAB 4
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 JPMorgan
Chase Bank, as trustee on behalf of C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2002-CB6, to accept the transfer of the above described
loan from Seller.
Seller agrees to indemnify and hold harmless JPMorgan Chase Bank,
Financial Asset Securities Corp., Greenwich Capital Markets, Inc. and
Residential Funding Securities Corporation for any losses incurred by such
parties resulting from the above described promissory note has been lost or
misplaced.
By:____________________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that
any representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
_____________________________
_____________________________
My commission expires ____________.
H-1
EXHIBIT I
FORM OF ERISA REPRESENTATION
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6, Class [ ]
------------------------------------------------
Ladies and Gentlemen:
1. The undersigned is the ______________________ of
(the "Transferee") a [corporation] duly organized and existing under the laws
of __________, on behalf of which he/she makes this affidavit.
2. The Transferee hereby acknowledges that under the
terms of the Pooling and Servicing Agreement (the "Agreement") among Financial
Asset Securities Corp., as depositor (the "Depositor"), Credit-Based Asset
Servicing and Securitization LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as
servicer and JPMorgan Chase Bank, as trustee (the "Trustee"), no transfer of
the ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Depositor and the Trustee (as defined in the Agreement) have
received a certificate from such transferee in the form hereof.
3. The Transferee either (x)(i) is not an employee
benefit plan or arrangement subject to Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
the Trustee of any such plan or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement or (ii)
(except in the case of the Class R-1, Class R-2, Class R-3, Class X, Class N,
Class B-2 or Class B-3 Certificates) is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and the purchase and holding
of such Certificates are covered under Sections I and III of PTCE 95-60 or (y)
shall deliver to the Certificate Registrar an opinion of counsel (a "Benefit
Plan Opinion") satisfactory to the Certificate Registrar, and upon which the
Trustee, the Depositor and the Servicer shall be entitled to rely, to the
effect that the purchase or holding of such Certificate by the Transferee will
not result in the assets of the Trust Fund being deemed to be plan assets and
subject to the prohibited transaction provisions of ERISA or the Code and will
not subject the Trustee, the Depositor or the Servicer to any obligation in
addition to those undertaken by such entities in the Pooling and Servicing
Agreement, which opinion of counsel shall not be an expense of the Trustee,
the Depositor or the Servicer.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
I-1
IN WITNESS WHEREOF, the Transferee has executed this
certificate.
______________________________
[Transferee]
By:___________________________
Name:
Title:
I-2
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6 (the "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 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),
(e) we agree that the Certificates must be held indefinitely by us and we
acknowledge that we are able to bear the economic risk of investment in the
Certificates, (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, (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
and (h) we acknowledge that the Certificates will bear a legend setting forth
the applicable restrictions on transfer.
J-1
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________
Authorized Officer
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6 (the "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 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, (d) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
J-3
Very truly yours,
[NAME OF TRANSFEREE]
By:_______________________________
Authorized Officer
J-4
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of
the Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ ____________(1) in securities
____ (except for the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation
(other than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which
is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and
loan association, building and loan association, cooperative
bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934.
--------
1 Buyer must own and/or invest on a discretionary basis at least
$__________ in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $__________ in
securities.
J-5
___ Insurance Company. The Buyer is an insurance
company whose primary and predominant business activity is
the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan
established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its
employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. 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.
iv. 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.
v. The Buyer acknowledges that it is familiar with
Rule 144A and understands that the seller to it and other parties related to
the Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
J-6
vi. 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
Buyer's Family of Investment Companies reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been published.
If clause (ii) in the preceding sentence applies, the securities may be valued
at market.
___ The Buyer owned $ ______________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
J-8
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
________________________________
Print Name of Buyer or Adviser
By:_____________________________
Name:
Title:
IF AN ADVISER:
_________________________________
Print Name of Buyer
Date:____________________________
J-9
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2002-CB6
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the proposed Transferee of an Ownership
Interest in the [Class R-1, Class R-2 and/or Class R-3 Certificates] (the
"Certificates") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Financial
Asset Securities Corp., as depositor, Credit-Based Asset Servicing and
Securitization LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer, and
JPMorgan Chase Bank, 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 Certificates 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 Certificates 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) for 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 Certificates if at
any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through entity
an affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
K-1
5. The Transferee has reviewed the provisions of Section
5.02(d) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificates 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 Certificates. 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 Certificates, 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 in this 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 Certificates.
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 Certificates 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
are we 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 ___________________ , 20__.
[NAME OF TRANSFEREE]
By:__________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
____________________________
Authorized Signatory
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 _____, 20__.
_____________________________
NOTARY PUBLIC
My Commission expires the ___day
of _________________, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Financial Asset Securities Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2002-CB6
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2002-CB6 (the "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,
[_____________________]
By: ___________________
L-1
EXHIBIT M
[RESERVED]
M-1
EXHIBIT N
[RESERVED]
N-1
EXHIBIT O
INELIGIBLE FORECLOSURE PROPERTY LOAN SCHEDULE
ON FILE WITH TRUSTEE
O-1
EXHIBIT P
MONTHLY INFORMATION DELIVERED BY SERVICER
1. With respect to the Mortgage Pool, the number and Principal
Balances of all Mortgage Loans which were the subject of Principal
Prepayments during the related Due Period.
2. With respect to the Mortgage Pool, the amount of all curtailments
which were received during the related Due Period.
3. With respect to the Mortgage Pool, the aggregate amount of
principal portion of all Monthly Payments received during the related Due
Period.
4. With respect to the Mortgage Pool, the amount of interest
received on the Mortgage Loans during the related Due Period.
5. With respect to the Mortgage Pool, the aggregate amount of the
Advances made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the delinquency and
foreclosure information and the amount of Mortgage Loan Losses during the
related Due Period.
7. With respect to the Mortgage Pool, the weighted average maturity,
the weighted average Mortgage Interest Rate and the weighted average Net
Mortgage Interest Rate as of the last day of the Due Period preceding of
the related Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during the
related Due Period.
9. The amount of all payments or reimbursements to the Servicer paid
or to be paid since the prior Distribution Date (or in the case of the
first Distribution Date, since the Closing Date).
10. The Pool Balance.
11. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Due Period.
12. The aggregate interest accrued on the Mortgage Loans at their
respective Mortgage Interest Rates for the related Due Period.
13. The amount deposited in the Collection Account which may not be
withdrawn therefrom pursuant to an Order of a United States Bankruptcy
Court of competent jurisdiction imposing a stay pursuant to Section 362
of U.S. Bankruptcy Code.
14. The aggregate Realized Losses since the Cut-off Date as of the end
of the related Due Period.
P-1
EXHIBIT Q
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
(Date)
Via Facsimile
JPMorgan Chase Bank, as Trustee
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Pre-Payments
------------
Dear Sir or Madam:
__________________ hereby certifies that he/she is an officer of the
Servicer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Mortgage Loans set forth in the attached
schedule:
1. A Principal Prepayment in full was received during the related Collection
Period;
2. Any prepayment penalty due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Collection Account; ____ Yes ____ No
3. As to each Mortgage Loan so noted on the attached schedule, all or part
of the prepayment penalty required in connection with the Principal
Prepayment in full was waived based upon (Circle one): (i) the Servicer's
determination that such waiver would maximize recovery of Liquidation
Proceeds for such Mortgage Loan, taking into account the value of such
prepayment penalty, or (ii)(A) the enforceability thereof be limited (1)
by bankruptcy insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
4. We certify that all amounts due in connection with the waiver of a
prepayment penalty inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section 3.01 of the Pooling and
Servicing Agreement, have been or will be so deposited.
Q-1
Capitalized terms used herein shall have the meanings ascribed to
such terms in the Pooling and Servicing Agreement, dated December 1, 2002,
among Financial Asset Securities Corp., as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as
servicer, and JPMorgan Chase Bank, as trustee.
By: ▇▇▇▇▇▇ LOAN SERVICING LP
----------------------------------
Name:
Title:
Q-2
EXHIBIT R
FORM OF CLASS 1-A1 CONFIRMATION
SWISS RE FINANCIAL PRODUCTS CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
DATE: December 23, 2002
TO: JPMorgan Chase Bank, not in its individual capacity, but solely
as Trustee for 2002-CB6 Trust ("Party B")
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services, C-BASS 2002-CB6
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Swiss Re Financial Products Corporation ("Party A")
RE: CORRIDOR TRANSACTION
Our Reference Number: 105089/105090
Dear Sir or Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMorgan Chase Bank, as
Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement (the
"PSA"), dated as of December 1, 2002, among Financial Asset Securities Corp.
as depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as trustee and Swiss Re
Financial Products Corporation (each a "party" and together "the parties") on
the Trade Date specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA (the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
This letter agreement constitutes a "Confirmation" and the definitions
and provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992 (the "Master Agreement"), with the attached Schedule
B as the
R-1
Schedule to the Master Agreement and the modifications provided below
(collectively, the "Agreement"). In the event of any inconsistency between the
provisions of the Master Agreement and this Confirmation and the attached
Schedule B, this Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation relates.
In addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and not as
agent when entering into the Transaction and in the case of Party B, it
is acting as Trustee when entering into the Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own account
and, in the case of Party B, it is acting as Trustee, and in the case
of both parties, it has made its own independent decisions to enter
into the Transaction and as to whether the Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice
or as a recommendation to enter into the Transaction; it being
understood that information and explanations related to the terms and
conditions of the Transaction shall not be considered investment advice
or a recommendation to enter into the Transaction. No communication
(written or oral) received from the other party shall be deemed to be
an assurance or guarantee as to the expected results of the
Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of the Agreement and that Transaction. It is also capable of assuming,
and assumes, the financial and other risks of the Agreement and that
Transaction.
(iv) Status of Parties. The other party is not acting as an agent, fiduciary
or advisor for it in respect of that Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: See Amortization Schedule, Schedule A
Trade Date: December 18, 2002
Effective Date: December 23, 2002
Termination Date: December 25, 2004, subject to adjustment in
accordance with the Modified Following Business Day
Convention
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: December 23, 2002.
Fixed Amount: USD 25,000.00
Floating Amounts I:
R-2
Floating Rate Payer: Party A
Cap Rate: See Schedule A
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing
January 25, 2003, through and including the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
Floating Amounts II:
Floating Rate Payer: Party B
Cap Rate: 9.53 percent
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing
January 25, 2003, through and including the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
R-3
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: ▇▇▇▇▇▇▇▇
Account of: Swiss Re Financial Products
Account No.: 066-911184
Account for payments to Party B: JPMorgan Chase Bank
New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account of: CBASS-2002-CB6
Account No.: ▇▇▇▇▇▇▇▇.3
5. Offices:
The Office of Party A for this Transaction is: New York
The Office of Party B for this Transaction is: New York
Please promptly confirm that the foregoing correctly sets forth the terms of
the Transaction entered into between us by executing this Confirmation and
returning it to us by facsimile to:
Swiss Re Financial Products Corporation
Attention: Derivatives Documentation
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: ________________________________________
Authorized Signatory
Accepted and confirmed as of the date first written above:
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE FOR 2002 CB6 TRUST
R-4
By: _______________________________________
Name:
Title:
Schedule A to the Confirmation dated as of December 23, 2002
Re: Reference Number 105089/105090
Amortization Schedule, subject to adjustment in accordance with the Modified
Following Business Day Convention
---------------------------------------------------------------------------------------------------------------------
From and including To but excluding Notional Amount (USD) Floating Amount I Cap
Rate
---------------------------------------------------------------------------------------------------------------------
December 23, 2002 January 25, 2003 78,464,000.00 6.00
---------------------------------------------------------------------------------------------------------------------
January 25, 2003 February 25, 2003 75,401,900.75 6.00
---------------------------------------------------------------------------------------------------------------------
February 25, 2003 March 25, 2003 72,431,000.85 6.00
---------------------------------------------------------------------------------------------------------------------
March 25, 2003 April 25, 2003 69,548,595.30 6.00
---------------------------------------------------------------------------------------------------------------------
April 25, 2003 May 25, 2003 66,752,059.17 6.00
---------------------------------------------------------------------------------------------------------------------
May 25, 2003 June 25, 2003 64,038,341.09 6.00
---------------------------------------------------------------------------------------------------------------------
June 25, 2003 July 25, 2003 61,405,502.30 6.00
---------------------------------------------------------------------------------------------------------------------
July 25, 2003 August 25, 2003 58,851,142.68 6.00
---------------------------------------------------------------------------------------------------------------------
August 25, 2003 September 25, 2003 56,372,933.10 6.00
---------------------------------------------------------------------------------------------------------------------
September 25, 2003 October 25, 2003 53,968,613.34 6.00
---------------------------------------------------------------------------------------------------------------------
October 25, 2003 November 25, 2003 51,635,863.70 6.00
---------------------------------------------------------------------------------------------------------------------
November 25, 2003 December 25, 2003 49,372,689.91 6.00
---------------------------------------------------------------------------------------------------------------------
December 25, 2003 January 25, 2004 47,177,026.11 8.00
---------------------------------------------------------------------------------------------------------------------
January 25, 2004 February 25, 2004 45,046,850.76 8.00
---------------------------------------------------------------------------------------------------------------------
February 25, 2004 March 25, 2004 42,980,238.30 8.00
---------------------------------------------------------------------------------------------------------------------
March 25, 2004 April 25, 2004 40,975,298.73 8.00
---------------------------------------------------------------------------------------------------------------------
April 25, 2004 May 25, 2004 39,030,200.09 8.00
---------------------------------------------------------------------------------------------------------------------
May 25, 2004 June 25, 2004 37,143,164.68 8.00
---------------------------------------------------------------------------------------------------------------------
June 25, 2004 July 25, 2004 35,312,323.72 8.00
---------------------------------------------------------------------------------------------------------------------
July 25, 2004 August 25, 2004 33,536,154.94 8.00
---------------------------------------------------------------------------------------------------------------------
August 25, 2004 September 25, 2004 31,813,160.50 8.00
---------------------------------------------------------------------------------------------------------------------
September 25, 2004 October 25, 2004 30,141,592.71 8.00
---------------------------------------------------------------------------------------------------------------------
October 25, 2004 November 25, 2004 28,522,053.35 8.00
---------------------------------------------------------------------------------------------------------------------
November 25, 2004 December 25, 2004 26,950,850.03 8.00
---------------------------------------------------------------------------------------------------------------------
Schedule B to the Confirmation dated as of December 23, 2002
Re: Reference Number 105089/105090
Between Swiss Re Financial Products Corporation ("Party A") and JPMorgan Chase
Bank, as Trustee (the "Trustee") pursuant to the Pooling and Servicing
Agreement (the "PSA"), dated as of December 1, 2002, among Financial Asset
Securities Corp. as depositor, Credit-Based Asset Servicing and Securitization
LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as
trustee.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
R-5
Section 5(a)(vii): none.
Section 5(b)(iv): none.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v)
of the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that
where there is an Event of Default under Section 5(a)(vii)(1), (3), (4),
(5), (6) or, to the extent analogous thereto, (8), and the Defaulting
Party is governed by a system of law that does not permit termination to
take place after the occurrence of such Event of Default, then the
Automatic Early Termination provisions of Section 6(a) will apply.
If an Early Termination Date has occurred under Section 6(a) of the
Agreement as a result of Automatic Early Termination, and if the
Non-defaulting Party determines that it has either sustained or incurred a
loss or damage or benefited from a gain in respect of any Transaction, as
a result of movement in interest rates, currency exchange rates, other
relevant rates or market quotations between the Early Termination Date and
the date upon which the Non-defaulting Party first becomes aware that such
Event of Default has occurred under Section 6(a) of the Agreement, then
(i) the amount of such loss or damage shall be added to the amount due by
the Defaulting Party or deducted from the amount due by the Non-defaulting
Party, as the case may be (in both cases pursuant to Section 6(e)(i)(3) of
the Agreement); or (ii) the amount of such gain shall be deducted from the
amount due by the Defaulting Party or added to the amount due by the
Non-defaulting Party, as the case may be (in both cases pursuant to
Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
R-6
(l) "Additional Termination Event" will not apply, except as provided in any
confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the Agreement,
Party A will make the following representation and Party B will not make
the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of the Agreement by reason of material prejudice
to its legal or commercial position.
Payee Representations. For the purpose of Section 3(f) of the Agreement,
Party A and Party B make the following representations:
(i) Party A represents that it is a corporation organized under the
laws of the State of Delaware.
(ii) Party B represents that it is the Trustee under the PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and
Party B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to Deliver Document Form/Document/ Date by Which
Certificate to be Delivered
Party A and Party B Any form or document required Promptly upon reasonable
or reasonably requested to demand by the other party.
allow the other party to make
payments under the Agreement
without any deduction or
withholding for or on account
of any Tax, or with such
deduction or withholding at a
reduced rate.
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
---------------------------------------------------------------------------------------------------------------------
Party required to Form/Document/or Date by which to be Covered by Section
---------------------------------------------------------------------------------------------------------------------
R-7
---------------------------------------------------------------------------------------------------------------------
deliver Certificate delivered 3(d) representation
---------------------------------------------------------------------------------------------------------------------
Party A and Party B Certified copy of the Board of Concurrently with the Yes
Directors resolution (or execution and delivery of
equivalent authorizing the Confirmation.
documentation) which sets forth
the authority of each signatory
to the Confirmation signing on
its behalf and the authority of
such party to enter into
Transactions contemplated and
performance of its obligations
hereunder.
---------------------------------------------------------------------------------------------------------------------
Party A and Party B Incumbency Certificate (or, if Concurrently with the Yes
available the current execution and delivery of
authorized signature book or the Confirmation unless
equivalent authorizing previously delivered and
documentation) specifying the still in full force and
names, titles, authority and effect.
specimen signatures of the
persons authorized to execute
the Confirmation which sets
forth the specimen signatures
of each signatory to the
Confirmation signing on its
behalf.
---------------------------------------------------------------------------------------------------------------------
Party A The Guaranty of Swiss Concurrently with the No
Reinsurance Company ("Swiss execution and delivery of
Re") dated as of September 15, the Confirmation.
2000, issued by Swiss Re as
Party A's Credit Support
Provider (in the form annexed
hereto as Exhibit A).
---------------------------------------------------------------------------------------------------------------------
Party B The PSA Concurrently with the No
execution and delivery of
the Confirmation.
---------------------------------------------------------------------------------------------------------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the
Agreement:
Addresses for notices or communications to Party A and to Party B shall
be those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: none.
R-8
Party B appoints as its Process Agent: none.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document: Guaranty
of Swiss Re dated as of September 15, 2000 in the form annexed hereto as
Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: none.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
conflicts of law provisions thereof).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall be
amended to include the following additional representations after
paragraph 3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives
any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
R-9
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party
B has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
with respect to this Transaction shall not constitute an Event of Default
or Potential Event of Default with respect to Party B as the Defaulting
Party and (b) Party A shall be entitled to designate an Early Termination
Event pursuant to Section 6 of the Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened Party.
For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the
Fixed Amount on the Fixed Rate Payer Payment Date.
(f) Trustee Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Trustee (i) this Confirmation is
executed and delivered JPMorgan Chase Bank, not in its individual
capacity but solely as Trustee under the PSA in the exercise of the
powers and authority conferred and vested in it thereunder and (iii)
under no circumstances JPMorgan Chase Bank in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party
unless (i) each party has given prior written consent to the party and
(ii) each of Standard and Poors, a Division of ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and ▇▇▇▇▇
Ratings ("Fitch") have been provided notice of such modification and
confirms in writing (including by facsimile transmission) within five
Business Days after such notice is given that it will not downgrade,
withdraw or modify its then-current rating of the C-BASS Mortgage Loan
Asset Backed Certificates, Series 2002-CB6 (the "Certificates").
(h) Proceedings.
Party A shall not institute against or cause any other person to
institute against, or join any other person in instituting against, the
2002-CB6 Trust, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any federal or
state bankruptcy, dissolution or similar law, for a period of one year
and one day following indefeasible payment in full of the Certificates.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction; provided that Floating
Amount II shall be taken into account into any calculation of amounts
owing by Party A.
(j) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
R-10
(k) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party within
(30) days of such Ratings Event that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved Ratings
Thresholds (as defined below) on terms substantially similar to this
Confirmation or (ii) deliver collateral, in an amount equal to the
Exposure (as defined below), and an executed ISDA Credit Support Annex
within (30) days of such Ratings Event and subject to S&P's and ▇▇▇▇▇'▇
written confirmation that delivery of such collateral in the context of
such downgrade will not result in a withdrawal, qualification or
downgrade of the then current ratings assigned to the Certificates . For
avoidance of doubt, a downgrade of the rating on the Certificates could
occur in the event that Party A does not post sufficient collateral. For
purposes of this Transaction, a "Ratings Event" shall occur with respect
to Party A (or any applicable credit support provider), if its short-term
unsecured and unsubordinated debt ceases to be rated at least "A-1" by
S&P and at least "P-1" by ▇▇▇▇▇'▇ (including in connection with a merger,
consolidation or other similar transaction by Party A or any applicable
credit support provider) such ratings being referred to herein as the
"Approved Ratings Thresholds," (unless, within 30 days thereafter, each
of ▇▇▇▇▇'▇ and S&P has reconfirmed the ratings of the Certificates, as
applicable, which was in effect immediately prior thereto. Only with
respect to such Ratings Event, "Exposure" shall mean the greater of the
following: (i) the ▇▇▇▇-to-market value of the Transaction as of the
Valuation Date (as such term is defined in the ISDA Credit Support
Annex); (ii) the amount of the next payment due under the Transaction and
(iii) one percent of the Notional Amount for the respective Calculation
Period.
(l) Additional Termination Events
Additional Termination Events will apply if a Ratings Event has occurred
and Party A has not, within 30 days, complied with clause (k) above, then
an Additional Termination Event shall have occurred with respect to Party
A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
(m) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third
line thereof and inserting the word "first" in place thereof.
Exhibit A
---------
GUARANTY
--------
The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely, unconditionally and irrevocably guaranties
the prompt payment as and when due of all present and future obligations of
its indirect, wholly-owned subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION,
a company incorporated in the State of Delaware ("THE GUARANTEED SUBSIDIARY")
including, without limitation, any obligation in any capacity under, in
connection with or ancillary to, contracts of insurance or reinsurance,
contracts for borrowed money and other evidences of indebtedness of any party,
however characterized, securities transactions, derivative, securitization and
alternative risk transfer transactions, any obligation in the nature of credit
extension, credit enhancement or contractual support, and any obligation
relating to transactions governed by ISDA Master Agreements entered into from
time to time by THE GUARANTEED SUBSIDIARY.
R-11
In the case of transactions governed by ISDA Master Agreements,
Guarantor's obligations under this Guaranty may be evidenced by and governed
in accordance with the terms of a subguaranty (a "Subguaranty"), substantially
in the form attached hereto.
This Guaranty constitutes a guaranty of payment when due and not of
collection and is not conditional or contingent upon any attempts to collect
from, or pursue or exhaust any rights or remedies against, THE GUARANTEED
SUBSIDIARY. A demand for payment hereunder may be made in writing addressed to
the Chief Financial Officer of the Guarantor.
Notwithstanding any reference to any obligation of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guaranty are its absolute
and independent obligations as a primary obligor and are in particular not
dependent in any way on the validity or enforceability of and are not subject
to any defense or excuse otherwise available under the guaranteed obligations
of THE GUARANTEED SUBSIDIARY (but no payment hereunder shall be required
unless the guaranteed obligations are due and payable in accordance with their
terms) and the Guaranty thereby constitutes and is intended by the parties to
constitute a non-accessory undertaking ("nicht akzessorische Verpflichtung")
within the meaning of Art. I I I of the Swiss Code of Obligations ("CO") and
not a mere surety ("Burgschaft") within the meaning of Art. 492 et seq. CO.
Upon payment by the Guarantor to any beneficiary of the amount due under
the Guarantee, the Guarantor shall be subrogated to the rights of the
beneficiary against THE GUARANTEED SUBSIDIARY to the extent satisfied by such
payment, and the beneficiary will take at the Guarantor's expense such steps
as the Guarantor may reasonably request to implement such subrogation. The
Guarantor shall not exercise any rights against THE GUARANTEED SUBSIDIARY
which it may acquire in consequence of such payment or subrogation unless and
until all the obligations of THE GUARANTEED SUBSIDIARY to such beneficiary
shall have been paid in full.
The Guarantor, and the signatories hereto acting jointly, hereby (i)
authorize THE GUARANTEED SUBSIDIARY to deliver copies of this Guaranty, and to
conclusively confirm its applicability to any transaction or obligation, to
such persons as it deems necessary or advisable, including, without
limitation, any counterparty to any transaction and any rating agency engaged
in providing a rating of THE GUARANTEED SUBSIDIARY or any of its obligations
or of any product offered or in any manner contractually supported by THE
GUARANTEED SUBSIDIARY and (ii) (a) authorize any one of the Chief Executive
Officer, the Chief Financial Officer and the Chief Risk Officer of the
Guarantor to execute in the name and on behalf of the Guarantor, in favor of
the counterparty to any ISDA Master Agreement entered into by THE GUARANTEED
SUBSIDIARY, and (b) authorize either such Member of the Executive Board or THE
GUARANTEED SUBSIDIARY to deliver to such counterparty a Subguaranty issued
under this Guaranty.
This Guaranty is governed and will be construed in accordance with Swiss
law. Exclusive place of jurisdiction for any legal proceeding hereunder shall
be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed in
its name this 15th day of September, 2000.
SWISS REINSURANCE COMPANY
By /EXECUTED/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By /EXECUTED/
R-12
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
R-13
EXHIBIT S
FORM OF CLASS 2-A1 CONFIRMATION
SWISS RE FINANCIAL PRODUCTS CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
DATE: December 23, 2002
TO: JPMorgan Chase Bank, not in its individual capacity,
but solely as Trustee for 2002-CB6 Trust
("Party B")
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services, C-BASS 2002-CB6
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Swiss Re Financial Products Corporation ("Party A")
RE: CORRIDOR TRANSACTION
Our Reference Number: 105085/105086
Dear Sir or Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMorgan Chase Bank, as
Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement (the
"PSA"), dated as of December 1, 2002, among Financial Asset Securities Corp.
as depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as trustee and Swiss Re
Financial Products Corporation (each a "party" and together "the parties") on
the Trade Date specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA (the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
This letter agreement constitutes a "Confirmation" and the
definitions and provisions contained in the original June 2000 ISDA
Definitions (the "Definitions") as published by the International Swaps and
Derivatives Association, Inc., ("ISDA") are incorporated into this
Confirmation. This Confirmation will be governed by and subject to the terms
and conditions which would be applicable if, prior to the Trade Date, the
parties had executed and delivered an ISDA Master Agreement
(Multicurrency-Cross Border), in the form published by ISDA in 1992
S-1
(the "Master Agreement"), with the attached Schedule B as the Schedule to the
Master Agreement and the modifications provided below (collectively, the
"Agreement"). In the event of any inconsistency between the provisions of the
Master Agreement and this Confirmation and the attached Schedule B, this
Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation relates.
In addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and not
as agent when entering into the Transaction and in the case of Party
B, it is acting as Trustee when entering into the Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own
account and, in the case of Party B, it is acting as Trustee, and in
the case of both parties, it has made its own independent decisions
to enter into the Transaction and as to whether the Transaction is
appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into the
Transaction; it being understood that information and explanations
related to the terms and conditions of the Transaction shall not be
considered investment advice or a recommendation to enter into the
Transaction. No communication (written or oral) received from the
other party shall be deemed to be an assurance or guarantee as to the
expected results of the Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of the Agreement and that Transaction. It is also capable of
assuming, and assumes, the financial and other risks of the Agreement
and that Transaction.
(iv) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: See Amortization Schedule, Schedule A
Trade Date: December 18, 2002
Effective Date: December 23, 2002
Termination Date: December 25, 2009, subject to adjustment in accordance
with the Modified Following Business Day Convention
S-2
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: December 23, 2002
Fixed Amount: USD 25,000.00
Floating Amounts I:
Floating Rate Payer: Party A
Cap Rate: See Schedule A
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing
January 25, 2003, through and including the Termination
Date, subject to adjustment in accordance with the
Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate Payer
Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
Floating Amounts II:
Floating Rate Payer: Party B
Cap Rate: 9.40 percent
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing
January 25, 2003, through and including the Termination
Date, subject to adjustment in accordance with the
Modified Following Business Day Convention
S-3
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate Payer
Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: ▇▇▇▇▇▇▇▇
Account of: Swiss Re Financial Products
Account No.: 066-911184
Account for payments to Party B: JPMorgan Chase Bank
New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account of: CBASS-2002-CB6
Account No.: ▇▇▇▇▇▇▇▇.3
5. Offices:
The Office of Party A for this Transaction is: New York
The Office of Party B for this Transaction is: New York
S-4
Please promptly confirm that the foregoing correctly sets forth the terms of
the Transaction entered into between us by executing this Confirmation and
returning it to us by facsimile to:
Swiss Re Financial Products Corporation
Attention: Derivatives Documentation
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: ________________________________________
Authorized Signatory
Accepted and confirmed as of the date first written above:
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE FOR 2002 CB6 TRUST
By: _______________________________________
Name:
Title:
S-5
Schedule A to the Confirmation dated as of December 23, 2002
Re: Reference Number 105085/105086
Amortization Schedule, subject to adjustment in accordance with the Modified
Following Business Day Convention
------------------------------- ---------------------------- ---------------------------- ----------------------------
From and including To but excluding Notional Amount (USD) Floating Amount I Cap Rate
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 23, 2002 January 25, 2003 53,198,000.00 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2003 February 25, 2003 51,449,813.77 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2003 March 25, 2003 49,746,223.51 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2003 April 25, 2003 48,085,958.88 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2003 May 25, 2003 46,468,015.13 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2003 June 25, 2003 44,890,958.70 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2003 July 25, 2003 43,354,078.77 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2003 August 25, 2003 41,856,335.16 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2003 September 25, 2003 40,396,715.11 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2003 October 25, 2003 38,974,232.54 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2003 November 25, 2003 37,587,927.36 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2003 December 25, 2003 36,236,807.92 6.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2003 January 25, 2004 34,920,024.19 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2004 February 25, 2004 33,636,676.69 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2004 March 25, 2004 32,385,884.13 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2004 April 25, 2004 31,166,831.52 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2004 May 25, 2004 29,978,709.19 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2004 June 25, 2004 28,820,670.30 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2004 July 25, 2004 27,691,991.39 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2004 August 25, 2004 26,591,916.61 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2004 September 25, 2004 25,519,875.71 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2004 October 25, 2004 24,474,976.87 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2004 November 25, 2004 23,456,533.21 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2004 December 25, 2004 22,463,854.08 8.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2004 January 25, 2005 21,496,277.95 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2005 February 25, 2005 20,553,154.08 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2005 March 25, 2005 19,633,861.91 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2005 April 25, 2005 18,737,790.39 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2005 May 25, 2005 17,864,344.43 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2005 June 25, 2005 17,012,944.95 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2005 July 25, 2005 16,182,997.05 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2005 August 25, 2005 15,373,982.58 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2005 September 25, 2005 14,585,366.05 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2005 October 25, 2005 13,816,625.92 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2005 November 25, 2005 13,067,321.36 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2005 December 25, 2005 12,336,886.65 8.50
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2005 January 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2006 February 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
S-6
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2006 March 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2006 April 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2006 May 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2006 June 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2006 July 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2006 August 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2006 September 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2006 October 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2006 November 25, 2006 11,624,840.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2006 December 25, 2006 11,511,669.11 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2006 January 25, 2007 11,230,942.08 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2007 February 25, 2007 10,957,251.55 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2007 March 25, 2007 10,690,419.05 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2007 April 25, 2007 10,430,270.66 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2007 May 25, 2007 10,176,614.75 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2007 June 25, 2007 9,929,309.83 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2007 July 25, 2007 9,688,195.07 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2007 August 25, 2007 9,453,113.74 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2007 September 25, 2007 9,223,913.17 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2007 October 25, 2007 9,000,444.61 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2007 November 25, 2007 8,782,563.14 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2007 December 25, 2007 8,570,127.57 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2007 January 25, 2008 8,363,000.31 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2008 February 25, 2008 8,161,047.32 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2008 March 25, 2008 7,964,138.01 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2008 April 25, 2008 7,772,145.13 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2008 May 25, 2008 7,584,944.69 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2008 June 25, 2008 7,402,415.87 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2008 July 25, 2008 7,224,440.96 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2008 August 25, 2008 7,050,905.25 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2008 September 25, 2008 6,881,696.98 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2008 October 25, 2008 6,716,707.23 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2008 November 25, 2008 6,555,829.87 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2008 December 25, 2008 6,398,961.50 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
December 25, 2008 January 25, 2009 6,246,001.33 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
January 25, 2009 February 25, 2009 6,096,851.17 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
February 25, 2009 March 25, 2009 5,951,415.30 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
March 25, 2009 April 25, 2009 5,809,600.49 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
April 25, 2009 May 25, 2009 5,671,315.83 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
May 25, 2009 June 25, 2009 5,536,472.78 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
June 25, 2009 July 25, 2009 5,404,985.01 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
July 25, 2009 August 25, 2009 5,276,768.42 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
August 25, 2009 September 25, 2009 5,151,741.02 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
September 25, 2009 October 25, 2009 5,029,822.94 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
October 25, 2009 November 25, 2009 4,910,936.29 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
November 25, 2009 December 25, 2009 4,795,005.22 9.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
S-7
Schedule B to the Confirmation dated as of December 23, 2002
Re: Reference Number 105085/105086
Between Swiss Re Financial Products Corporation ("Party A") and JPMorgan Chase
Bank, as Trustee (the "Trustee") pursuant to the Pooling and Servicing
Agreement (the "PSA"), dated as of December 1, 2002, among Financial Asset
Securities Corp. as depositor, Credit-Based Asset Servicing and Securitization
LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as
trustee.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v)
of the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that
where there is an Event of Default under Section 5(a)(vii)(1), (3), (4),
(5), (6) or, to the extent analogous thereto, (8), and the Defaulting
Party is governed by a system of law that does not permit termination to
take
S-8
place after the occurrence of such Event of Default, then the
Automatic Early Termination provisions of Section 6(a) will apply.
If an Early Termination Date has occurred under Section 6(a) of the Agreement
as a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement
in interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has
occurred under Section 6(a) of the Agreement, then (i) the amount of such loss
or damage shall be added to the amount due by the Defaulting Party or deducted
from the amount due by the Non-defaulting Party, as the case may be (in both
cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the amount of
such gain shall be deducted from the amount due by the Defaulting Party or
added to the amount due by the Non-defaulting Party, as the case may be (in
both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided in any
confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the
Agreement, Party A will make the following representation and Party B
will not make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of the Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of the Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of the Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of the
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) of
the Agreement by reason of material prejudice to its legal or
commercial position.
Payee Representations. For the purpose of Section 3(f) of the
Agreement, Party A and Party B make the following representations:
S-9
(i) Party A represents that it is a corporation organized
under the laws of the State of Delaware.
(ii) Party B represents that it is the Trustee under the PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and
Party B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to Deliver Form/Document/ Date by which to be delivered
Document Certificate Promptly upon reasonable demand
Party A and Party B Any form or document required or by the other party.
reasonably requested to allow the
other party to make payments under
the Agreement without any deduction
or withholding for or on account of
any Tax, or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
------------------------------ ---------------------------------- --------------------------- -----------------------
Party Required to Deliver Form/Document/or Date by which to be Covered by Section
Document Certificate delivered 3(d) representation
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Certified copy of the Board of Concurrently with the Yes
Directors resolution (or execution and delivery of
equivalent authorizing the Confirmation
documentation) which sets forth
the authority of each signatory
to the Confirmation signing on
its behalf and the authority of
such party to enter into
Transactions contemplated and
performance of its obligations
hereunder.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Incumbency Certificate (or, if Concurrently with the Yes
available the current authorized execution and delivery of
signature book or equivalent the Confirmation unless
authorizing documentation) previously delivered and
specifying the names, titles, still in full force and
authority and specimen effect.
signatures of the persons
authorized to
------------------------------ ---------------------------------- --------------------------- -----------------------
S-10
------------------------------ ---------------------------------- --------------------------- -----------------------
execute the Confirmation
which sets forth the
specimen signatures of each
signatory to the Confirmation
signing on its behalf.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A The Guaranty of Swiss Concurrently with the No
Reinsurance Company ("Swiss Re") execution and delivery of
dated as of September 15, 2000, the Confirmation.
issued by Swiss Re as Party A's
Credit Support Provider (in the
form annexed hereto as Exhibit
A).
------------------------------ ---------------------------------- --------------------------- -----------------------
------------------------------ ---------------------------------- --------------------------- -----------------------
Party B The PSA Concurrently with the No
execution and delivery of
the Confirmation.
------------------------------ ---------------------------------- --------------------------- -----------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the
Agreement:
Addresses for notices or communications to Party A and to Party B shall
be those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: none.
Party B appoints as its Process Agent: none.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document: Guaranty
of Swiss Re dated as of September 15, 2000 in the form annexed hereto as
Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: none.
S-11
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
conflicts of law provisions thereof).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall be
amended to include the following additional representations after
paragraph 3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
with respect to this Transaction shall not constitute an Event of Default
or Potential Event of Default with respect to Party B as the Defaulting
Party and (b) Party A shall be entitled to designate an Early Termination
Event pursuant to Section 6 of the Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened Party.
For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the
Fixed Amount on the Fixed Rate Payer Payment Date.
S-12
(f) Trustee Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Trustee (i) this Confirmation is
executed and delivered JPMorgan Chase Bank, not in its individual capacity
but solely as Trustee under the PSA in the exercise of the powers and
authority conferred and vested in it thereunder and (iii) under no
circumstances JPMorgan Chase Bank in its individual capacity be personally
liable for the payment of any indebtedness or expenses or be personally
liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken under this Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
(i) each party has given prior written consent to the party and (ii) each
of Standard and Poors, a Division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"),
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and ▇▇▇▇▇ Ratings ("Fitch")
have been provided notice of such modification and confirms in writing
(including by facsimile transmission) within five Business Days after such
notice is given that it will not downgrade, withdraw or modify its
then-current rating of the C-BASS Mortgage Loan Asset Backed Certificates,
Series 2002-CB6 (the "Certificates").
(h) Proceedings.
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against, the 2002-CB6
Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy, dissolution or similar law, for a period of one year and one
day following indefeasible payment in full of the Certificates.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction; provided that Floating
Amount II shall be taken into account into any calculation of amounts
owing by Party A.
(j) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
(k) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party within
(30) days of such Ratings Event that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved Ratings
Thresholds (as defined below) on terms substantially similar to this
Confirmation or (ii) deliver collateral, in an amount equal to the
Exposure (as defined below), and an executed ISDA Credit Support Annex
within (30) days of such Ratings Event and subject
S-13
to S&P's and Moody's written confirmation that delivery of such collateral
in the context of such downgrade will not result in a withdrawal,
qualification or downgrade of the then current ratings assigned to the
Certificates . For avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that Party A does not post
sufficient collateral. For purposes of this Transaction, a "Ratings Event"
shall occur with respect to Party A (or any applicable credit support
provider), if its short-term unsecured and unsubordinated debt ceases to
be rated at least "A-1" by S&P and at least "P-1" by ▇▇▇▇▇'▇ (including in
connection with a merger, consolidation or other similar transaction by
Party A or any applicable credit support provider) such ratings being
referred to herein as the "Approved Ratings Thresholds," (unless, within
30 days thereafter, each of Moody's and S&P has reconfirmed the ratings of
the Certificates, as applicable, which was in effect immediately prior
thereto. Only with respect to such Ratings Event, "Exposure" shall mean
the greater of the following: (i) the ▇▇▇▇-to-market value of the
Transaction as of the Valuation Date (as such term is defined in the ISDA
Credit Support Annex); (ii) the amount of the next payment due under the
Transaction and (iii) one percent of the Notional Amount for the
respective Calculation Period.
(l) Additional Termination Events
Additional Termination Events will apply if a Ratings Event has occurred
and Party A has not, within 30 days, complied with clause (k) above, then
an Additional Termination Event shall have occurred with respect to Party
A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
(m) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third line
thereof and inserting the word "first" in place thereof.
S-14
Exhibit A
GUARANTY
The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely, unconditionally and irrevocably guaranties
the prompt payment as and when due of all present and future obligations of
its indirect, wholly-owned subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION,
a company incorporated in the State of Delaware ("THE GUARANTEED SUBSIDIARY")
including, without limitation, any obligation in any capacity under, in
connection with or ancillary to, contracts of insurance or reinsurance,
contracts for borrowed money and other evidences of indebtedness of any party,
however characterized, securities transactions, derivative, securitization and
alternative risk transfer transactions, any obligation in the nature of credit
extension, credit enhancement or contractual support, and any obligation
relating to transactions governed by ISDA Master Agreements entered into from
time to time by THE GUARANTEED SUBSIDIARY.
In the case of transactions governed by ISDA Master Agreements,
Guarantor's obligations under this Guaranty may be evidenced by and governed
in accordance with the terms of a subguaranty (a "Subguaranty"), substantially
in the form attached hereto.
This Guaranty constitutes a guaranty of payment when due and not of
collection and is not conditional or contingent upon any attempts to collect
from, or pursue or exhaust any rights or remedies against, THE GUARANTEED
SUBSIDIARY. A demand for payment hereunder may be made in writing addressed to
the Chief Financial Officer of the Guarantor.
Notwithstanding any reference to any obligation of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guaranty are its absolute
and independent obligations as a primary obligor and are in particular not
dependent in any way on the validity or enforceability of and are not subject
to any defense or excuse otherwise available under the guaranteed obligations
of THE GUARANTEED SUBSIDIARY (but no payment hereunder shall be required
unless the guaranteed obligations are due and payable in accordance with their
terms) and the Guaranty thereby constitutes and is intended by the parties to
constitute a non-accessory undertaking ("nicht akzessorische Verpflichtung")
within the meaning of Art. I I I of the Swiss Code of Obligations ("CO") and
not a mere surety ("Burgschaft") within the meaning of Art. 492 et seq. CO.
Upon payment by the Guarantor to any beneficiary of the amount due under
the Guarantee, the Guarantor shall be subrogated to the rights of the
beneficiary against THE GUARANTEED SUBSIDIARY to the extent satisfied by such
payment, and the beneficiary will take at the Guarantor's expense such steps
as the Guarantor may reasonably request to implement such subrogation. The
Guarantor shall not exercise any rights against THE GUARANTEED SUBSIDIARY
which it may acquire in consequence of such payment or subrogation unless and
until all the obligations of THE GUARANTEED SUBSIDIARY to such beneficiary
shall have been paid in full.
The Guarantor, and the signatories hereto acting jointly, hereby (i)
authorize THE GUARANTEED SUBSIDIARY to deliver copies of this Guaranty, and to
conclusively confirm its applicability to any transaction or obligation, to
such persons as it deems necessary or advisable, including, without
limitation, any counterparty to any transaction and any rating
S-15
agency engaged in providing a rating of THE GUARANTEED SUBSIDIARY or any of
its obligations or of any product offered or in any manner contractually
supported by THE GUARANTEED SUBSIDIARY and (ii) (a) authorize any one of the
Chief Executive Officer, the Chief Financial Officer and the Chief Risk
Officer of the Guarantor to execute in the name and on behalf of the
Guarantor, in favor of the counterparty to any ISDA Master Agreement entered
into by THE GUARANTEED SUBSIDIARY, and (b) authorize either such Member of the
Executive Board or THE GUARANTEED SUBSIDIARY to deliver to such counterparty a
Subguaranty issued under this Guaranty.
This Guaranty is governed and will be construed in accordance with Swiss
law. Exclusive place of jurisdiction for any legal proceeding hereunder shall
be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
in its name this 15th day of September, 2000.
SWISS REINSURANCE COMPANY
By: /EXECUTED
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /EXECUTED
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
S-16
EXHIBIT T
FORM OF CLASS M-1 CONFIRMATION
SWISS RE FINANCIAL PRODUCTS CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
DATE: December 23, 2002
TO: JPMorgan Chase Bank, not in its individual capacity,
but solely as Trustee for 2002-CB6 Trust
("Party B")
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services, C-BASS 2002-CB6
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Swiss Re Financial Products Corporation ("Party A")
RE: CORRIDOR TRANSACTION
Our Reference Number: 105081/105082
Dear Sir or Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMorgan Chase Bank, as
Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement (the
"PSA"), dated as of December 1, 2002, among Financial Asset Securities Corp.
as depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as trustee and Swiss Re
Financial Products Corporation (each a "party" and together "the parties") on
the Trade Date specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA (the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
This letter agreement constitutes a "Confirmation" and the definitions
and provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992
T-1
(the "Master Agreement"), with the attached Schedule A as the Schedule to the
Master Agreement and the modifications provided below (collectively, the
"Agreement"). In the event of any inconsistency between the provisions of the
Master Agreement and this Confirmation and the attached Schedule B, this
Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation
relates. In addition, each party represents to the other party and will be
deemed to represent to the other party on the date on which it enters into
a Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):
(i) Principal. In the case of Party A, it is acting as principal and
not as agent when entering into the Transaction and in the case of
Party B, it is acting as Trustee when entering into the
Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own
account and, in the case of Party B, it is acting as Trustee, and
in the case of both parties, it has made its own independent
decisions to enter into the Transaction and as to whether the
Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a
recommendation to enter into the Transaction; it being understood
that information and explanations related to the terms and
conditions of the Transaction shall not be considered investment
advice or a recommendation to enter into the Transaction. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected
results of the Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Agreement and that Transaction. It is
also capable of assuming, and assumes, the financial and other
risks of the Agreement and that Transaction.
(iv) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: 21,998,000.00
Trade Date: December 18, 2002
Effective Date: December 23, 2002
Termination Date: February 25, 2006, subject to adjustment
in accordance with the Modified Following
Business Day Convention
Fixed Amounts:
T-2
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: December 23, 2002
Fixed Amount: USD 25,000.00
Floating Amounts I:
Floating Rate Payer: Party A
Cap Rate: For each Calculation Period, the Cap Rate set forth opposite the
scheduled first day of such Calculation Period (and any
subsequent Calculation Period until a new Cap Rate has become
applicable) as set forth below:
Scheduled First Day
of Calculation Period: Cap Rate:
December 23, 2002 5.00%
December 25, 2003 7.00%
September 25, 2004 7.50%
February 25, 2005 8.00%
September 25, 2005 8.50%
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing January 25, 2003,
through and including the Termination Date, subject to adjustment in
accordance with the Modified Following Business Day Convention.
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
Floating Amounts II:
Floating Rate Payer: Party B
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Cap Rate: 8.75 percent
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing January 25, 2003,
through and including the Termination Date, subject to adjustment in
accordance with the Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: ▇▇▇▇▇▇▇▇
Account of: Swiss Re Financial Products
Account No.: 066-911184
Account for payments to Party B: JPMorgan Chase Bank
New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account of: CBASS-2002-CB6
Account No.: ▇▇▇▇▇▇▇▇.3
5. Offices:
The Office of Party A for this Transaction is: New York
The Office of Party B for this Transaction is: New York
T-4
Please promptly confirm that the foregoing correctly sets forth the terms of
the Transaction entered into between us by executing this Confirmation and
returning it to us by facsimile to:
Swiss Re Financial Products Corporation
Attention: Derivatives Documentation
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: ________________________________________
Authorized Signatory
Accepted and confirmed as of the date first written above:
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE FOR 2002 CB6 TRUST
By: _______________________________________
Name:
Title:
T-5
Schedule A to the Confirmation dated as of December 23, 2002
Re: Reference Number 105081/105082
Between Swiss Re Financial Products Corporation ("Party A") and JPMorgan Chase
Bank, as Trustee (the "Trustee") pursuant to the Pooling and Servicing
Agreement (the "PSA"), dated as of December 1, 2002, among Financial Asset
Securities Corp. as depositor, Credit-Based Asset Servicing and Securitization
LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as
trustee.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that where
there is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5),
(6) or, to the extent analogous thereto, (8), and the Defaulting Party is
governed by a system of law that does not permit termination to take
T-6
place after the occurrence of such Event of Default, then the Automatic
Early Termination provisions of Section 6(a) will apply.
If an Early Termination Date has occurred under Section 6(a) of the Agreement
as a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement
in interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has
occurred under Section 6(a) of the Agreement, then (i) the amount of such loss
or damage shall be added to the amount due by the Defaulting Party or deducted
from the amount due by the Non-defaulting Party, as the case may be (in both
cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the amount of
such gain shall be deducted from the amount due by the Defaulting Party or
added to the amount due by the Non-defaulting Party, as the case may be (in
both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of
the Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided
in any confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the
Agreement, Party A will make the following representation and Party B
will not make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of the Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of the Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of the Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of the
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) of
the Agreement by reason of material prejudice to its legal or
commercial position.
Payee Representations. For the purpose of Section 3(f) of the
Agreement, Party A and Party B make the following representations:
T-7
(i) Party A represents that it is a corporation organized under the laws
of the State of Delaware.
(ii) Party B represents that it is the Trustee under the PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and
Party B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to Deliver Form/Document/ Date by which to be delivered
Document Certificate Promptly upon reasonable
Party A and Party B Any form or document required or demand by the other party.
reasonably requested to allow the
other party to make payments under
the Agreement without any deduction
or withholding for or on account of
any Tax, or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
------------------------------ ---------------------------------- --------------------------- -----------------------
Party Required to Deliver Form/Document/or Date by which to be Covered by Section
Document Certificate delivered 3(d) representation
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Certified copy of the Board of Concurrently with the Yes
Directors resolution (or execution and delivery of
equivalent authorizing the Confirmation
documentation) which sets forth
the authority of each signatory
to the Confirmation signing on
its behalf and the authority of
such party to enter into
Transactions contemplated and
performance of its obligations
hereunder.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Incumbency Certificate (or, if Concurrently with the Yes
available the current authorized execution and delivery of
signature book or equivalent the Confirmation unless
authorizing documentation) previously delivered and
specifying the names, titles, still in full force and
authority and specimen effect.
signatures of the persons
authorized to execute the
Confirmation
------------------------------ ---------------------------------- --------------------------- -----------------------
T-8
------------------------------ ---------------------------------- --------------------------- -----------------------
which sets forth
the specimen signatures of each
signatory to the Confirmation
signing on its behalf.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A The Guaranty of Swiss Concurrently with the No
Reinsurance Company ("Swiss Re") execution and delivery of
dated as of September 15, 2000, the Confirmation.
issued by Swiss Re as Party A's
Credit Support Provider (in the
form annexed hereto as Exhibit
A).
------------------------------ ---------------------------------- --------------------------- -----------------------
------------------------------ ---------------------------------- --------------------------- -----------------------
Party B The PSA Concurrently with the No
execution and delivery of
the Confirmation.
------------------------------ ---------------------------------- --------------------------- -----------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the
Agreement:
Addresses for notices or communications to Party A and to Party B
shall be those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: none.
Party B appoints as its Process Agent: none.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the
Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support
Document: Guaranty of Swiss Re dated as of September 15, 2000 in the
form annexed hereto as Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: none.
T-9
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
conflicts of law provisions thereof).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall be
amended to include the following additional representations after
paragraph 3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives
any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party
B has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
with respect to this Transaction shall not constitute an Event of Default
or Potential Event of Default with respect to Party B as the Defaulting
Party and (b) Party A shall be entitled to designate an Early Termination
Event pursuant to Section 6 of the Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened Party.
For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the
Fixed Amount on the Fixed Rate Payer Payment Date.
T-10
(f) Trustee Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Trustee (i) this Confirmation is
executed and delivered JPMorgan Chase Bank, not in its individual
capacity but solely as Trustee under the PSA in the exercise of the
powers and authority conferred and vested in it thereunder and (iii)
under no circumstances JPMorgan Chase Bank in its individual capacity be
personally liable for the payment of any indebtedness or expenses or be
personally liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken under this
Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party
unless (i) each party has given prior written consent to the party and
(ii) each of Standard and Poors, a Division of ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and ▇▇▇▇▇
Ratings ("Fitch") have been provided notice of such modification and
confirms in writing (including by facsimile transmission) within five
Business Days after such notice is given that it will not downgrade,
withdraw or modify its then-current rating of the C-BASS Mortgage Loan
Asset Backed Certificates, Series 2002-CB6 (the "Certificates").
(h) Proceedings.
Party A shall not institute against or cause any other person to
institute against, or join any other person in instituting against, the
2002-CB6 Trust, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any federal or
state bankruptcy, dissolution or similar law, for a period of one year
and one day following indefeasible payment in full of the Certificates.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction; provided that Floating
Amount II shall be taken into account into any calculation of amounts
owing by Party A.
(j) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
(k) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party within
(30) days of such Ratings Event that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved Ratings
Thresholds (as defined below) on terms substantially similar to this
Confirmation or (ii) deliver collateral, in an amount equal to the
Exposure (as defined below), and an executed ISDA Credit Support Annex
within (30) days of such Ratings Event and subject
T-11
to S&P's and Moody's written confirmation that delivery of such
collateral in the context of such downgrade will not result in a
withdrawal, qualification or downgrade of the then current ratings
assigned to the Certificates . For avoidance of doubt, a downgrade of the
rating on the Certificates could occur in the event that Party A does not
post sufficient collateral. For purposes of this Transaction, a "Ratings
Event" shall occur with respect to Party A (or any applicable credit
support provider), if its short-term unsecured and unsubordinated debt
ceases to be rated at least "A-1" by S&P and at least "P-1" by Moody's
(including in connection with a merger, consolidation or other similar
transaction by Party A or any applicable credit support provider) such
ratings being referred to herein as the "Approved Ratings Thresholds,"
(unless, within 30 days thereafter, each of Moody's and S&P has
reconfirmed the ratings of the Certificates, as applicable, which was in
effect immediately prior thereto. Only with respect to such Ratings
Event, "Exposure" shall mean the greater of the following: (i) the
▇▇▇▇-to-market value of the Transaction as of the Valuation Date (as such
term is defined in the ISDA Credit Support Annex); (ii) the amount of the
next payment due under the Transaction and (iii) one percent of the
Notional Amount for the respective Calculation Period.
(l) Additional Termination Events
Additional Termination Events will apply if a Ratings Event has occurred
and Party A has not, within 30 days, complied with clause (k) above, then
an Additional Termination Event shall have occurred with respect to Party
A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
(m) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third
line thereof and inserting the word "first" in place thereof.
T-12
Exhibit A
GUARANTY
The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely, unconditionally and irrevocably guaranties
the prompt payment as and when due of all present and future obligations of
its indirect, wholly-owned subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION,
a company incorporated in the State of Delaware ("THE GUARANTEED SUBSIDIARY")
including, without limitation, any obligation in any capacity under, in
connection with or ancillary to, contracts of insurance or reinsurance,
contracts for borrowed money and other evidences of indebtedness of any party,
however characterized, securities transactions, derivative, securitization and
alternative risk transfer transactions, any obligation in the nature of credit
extension, credit enhancement or contractual support, and any obligation
relating to transactions governed by ISDA Master Agreements entered into from
time to time by THE GUARANTEED SUBSIDIARY.
In the case of transactions governed by ISDA Master Agreements,
Guarantor's obligations under this Guaranty may be evidenced by and governed
in accordance with the terms of a subguaranty (a "Subguaranty"), substantially
in the form attached hereto.
This Guaranty constitutes a guaranty of payment when due and not of
collection and is not conditional or contingent upon any attempts to collect
from, or pursue or exhaust any rights or remedies against, THE GUARANTEED
SUBSIDIARY. A demand for payment hereunder may be made in writing addressed to
the Chief Financial Officer of the Guarantor.
Notwithstanding any reference to any obligation of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guaranty are its absolute
and independent obligations as a primary obligor and are in particular not
dependent in any way on the validity or enforceability of and are not subject
to any defense or excuse otherwise available under the guaranteed obligations
of THE GUARANTEED SUBSIDIARY (but no payment hereunder shall be required
unless the guaranteed obligations are due and payable in accordance with their
terms) and the Guaranty thereby constitutes and is intended by the parties to
constitute a non-accessory undertaking ("nicht akzessorische Verpflichtung")
within the meaning of Art. I I I of the Swiss Code of Obligations ("CO") and
not a mere surety ("Burgschaft") within the meaning of Art. 492 et seq. CO.
Upon payment by the Guarantor to any beneficiary of the amount due under
the Guarantee, the Guarantor shall be subrogated to the rights of the
beneficiary against THE GUARANTEED SUBSIDIARY to the extent satisfied by such
payment, and the beneficiary will take at the Guarantor's expense such steps
as the Guarantor may reasonably request to implement such subrogation. The
Guarantor shall not exercise any rights against THE GUARANTEED SUBSIDIARY
which it may acquire in consequence of such payment or subrogation unless and
until all the obligations of THE GUARANTEED SUBSIDIARY to such beneficiary
shall have been paid in full.
The Guarantor, and the signatories hereto acting jointly, hereby (i)
authorize THE GUARANTEED SUBSIDIARY to deliver copies of this Guaranty, and to
conclusively confirm its applicability to any transaction or obligation, to
such persons as it deems necessary or advisable, including, without
limitation, any counterparty to any transaction and any rating
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agency engaged in providing a rating of THE GUARANTEED SUBSIDIARY or any of
its obligations or of any product offered or in any manner contractually
supported by THE GUARANTEED SUBSIDIARY and (ii) (a) authorize any one of the
Chief Executive Officer, the Chief Financial Officer and the Chief Risk
Officer of the Guarantor to execute in the name and on behalf of the
Guarantor, in favor of the counterparty to any ISDA Master Agreement entered
into by THE GUARANTEED SUBSIDIARY, and (b) authorize either such Member of the
Executive Board or THE GUARANTEED SUBSIDIARY to deliver to such counterparty a
Subguaranty issued under this Guaranty.
This Guaranty is governed and will be construed in accordance with Swiss
law. Exclusive place of jurisdiction for any legal proceeding hereunder shall
be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
in its name this 15th day of September, 2000.
SWISS REINSURANCE COMPANY
By: /EXECUTED
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /EXECUTED
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
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EXHIBIT U
FORM OF CLASS M-2V CONFIRMATION
SWISS RE FINANCIAL PRODUCTS CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
DATE: December 23, 2002
TO: JPMorgan Chase Bank, not in its individual capacity,
but solely as Trustee for 2002-CB6 Trust ("Party B")
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services, C-BASS 2002-CB6
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Swiss Re Financial Products Corporation ("Party A")
RE: CORRIDOR TRANSACTION
Our Reference Number: 105076/105080
Dear Sir or Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMorgan Chase Bank, as
Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement (the
"PSA"), dated as of December 1, 2002, among Financial Asset Securities Corp.
as depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as trustee and Swiss Re
Financial Products Corporation (each a "party" and together "the parties") on
the Trade Date specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA (the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
This letter agreement constitutes a "Confirmation" and the definitions
and provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992 (the "Master Agreement"), with the attached Schedule
A as the Schedule to the Master
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Agreement and the modifications provided below (collectively, the
"Agreement"). In the event of any inconsistency between the provisions of the
Master Agreement and this Confirmation and the attached Schedule B, this
Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation relates.
In addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and not as
agent when entering into the Transaction and in the case of Party B, it
is acting as Trustee when entering into the Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own account
and, in the case of Party B, it is acting as Trustee, and in the case of
both parties, it has made its own independent decisions to enter into
the Transaction and as to whether the Transaction is appropriate or
proper for it based upon its own judgment and upon advice from such
advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice
or as a recommendation to enter into the Transaction; it being
understood that information and explanations related to the terms and
conditions of the Transaction shall not be considered investment advice
or a recommendation to enter into the Transaction. No communication
(written or oral) received from the other party shall be deemed to be an
assurance or guarantee as to the expected results of the Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
the Agreement and that Transaction. It is also capable of assuming, and
assumes, the financial and other risks of the Agreement and that
Transaction.
(iv) Status of Parties. The other party is not acting as an agent, fiduciary
or advisor for it in respect of that Transaction
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount:
14,000,000.00
Trade Date:
December 18, 2002
Effective Date:
December 23, 2002
Termination Date: February 25, 2006, subject to adjustment in
accordance with the Modified Following Business
Day Convention
Fixed Amounts:
Fixed Rate Payer: Party B
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Fixed Rate Payer Payment Date: December 23, 2002
Fixed Amount: USD 25,000.00
Floating Amounts I:
Floating Rate Payer: Party A
Cap Rate: For each Calculation Period, the Cap Rate set forth opposite the
scheduled first day of such Calculation Period (and any subsequent
Calculation Period until a new Cap Rate has become applicable) as set
forth below:
Scheduled First Day
of Calculation Period: Cap Rate:
December 23, 2002 4.00%
September 25, 2003 4.50%
December 25, 2003 6.00%
September 25, 2004 6.50%
February 25, 2005 7.00%
September 25, 2005 7.50%
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing January 25, 2003,
through and including the Termination Date, subject to adjustment in
accordance with the Modified Following Business Day Convention.
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating
Rate Payer Period End Date.
Floating Rate Option:
USD-LIBOR-BBA
Designated Maturity:
One month
Spread:
None
Floating Rate Day Count Fraction:
Actual/360
Reset Dates:
First day of each Calculation Period
Business Days for payment:
New York
Calculation Agent:
Party A
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Floating Amounts II:
Floating Rate Payer: Party B
Cap Rate: 7.75 percent
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing January 25, 2003,
through and including the Termination Date, subject to adjustment in
accordance with the Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating
Rate Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: ▇▇▇▇▇▇▇▇
Account of: Swiss Re Financial Products
Account No.: 066-911184
Account for payments to Party B: JPMorgan Chase Bank
New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account of: CBASS-2002-CB6
Account No.: ▇▇▇▇▇▇▇▇.3
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5. Offices:
The Office of Party A for this Transaction is: New York
The Office of Party B for this Transaction is: New York
Please promptly confirm that the foregoing correctly sets forth the terms of
the Transaction entered into between us by executing this Confirmation and
returning it to us by facsimile to:
Swiss Re Financial Products Corporation
Attention: Derivatives Documentation
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: ________________________________________
Authorized Signatory
Accepted and confirmed as of the date first written above:
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE FOR 2002 CB6 TRUST
By: _______________________________________
Name:
Title:
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Schedule A to the Confirmation dated as of December 23, 2002
Re: Reference Number 105076/105080
Between Swiss Re Financial Products Corporation ("Party A") and JPMorgan Chase
Bank, as Trustee (the "Trustee") pursuant to the Pooling and Servicing
Agreement (the "PSA"), dated as of December 1, 2002, among Financial Asset
Securities Corp. as depositor, Credit-Based Asset Servicing and Securitization
LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as
trustee.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
(b) "Specified Transaction" will have the meaning specified in
Section 14 of the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the
Agreement will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v)
of the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that
where there is an Event of Default under Section 5(a)(vii)(1), (3), (4),
(5), (6) or, to the extent analogous thereto, (8), and the Defaulting
Party is governed by a system of law that does not permit termination to
take
U-6
place after the occurrence of such Event of Default, then the Automatic
Early Termination provisions of Section 6(a) will apply.
If an Early Termination Date has occurred under Section 6(a) of the Agreement
as a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement
in interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has
occurred under Section 6(a) of the Agreement, then (i) the amount of such loss
or damage shall be added to the amount due by the Defaulting Party or deducted
from the amount due by the Non-defaulting Party, as the case may be (in both
cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the amount of
such gain shall be deducted from the amount due by the Defaulting Party or
added to the amount due by the Non-defaulting Party, as the case may be (in
both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided in any
confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the Agreement,
Party A will make the following representation and Party B will not make
the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of the Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on (i)
the accuracy of any representations made by the other party pursuant to
Section 3(f) of the Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of the Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section
4(d) of the Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) of the
Agreement by reason of material prejudice to its legal or commercial
position.
Payee Representations. For the purpose of Section 3(f) of the Agreement,
Party A and Party B make the following representations:
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(i) Party A represents that it is a corporation organized under the laws
of the State of Delaware.
(ii) Party B represents that it is the Trustee under the PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and
Party B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to Deliver Form/Document/
Document Certificate Date by which to be delivered
Party A and Party B Any form or document required or Promptly upon reasonable demand
reasonably requested to allow the by the other party.
other party to make payments under
the Agreement without any deduction
or withholding for or on account of
any Tax, or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
------------------------------ ---------------------------------- --------------------------- -----------------------
Party Required to Deliver Form/Document/or Date by which to be Covered by Section
Document Certificate delivered 3(d) representation
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Certified copy of the Board of Concurrently with the Yes
Directors resolution (or execution and delivery of
equivalent authorizing the Confirmation
documentation) which sets forth
the authority of each signatory
to the Confirmation signing on
its behalf and the authority of
such party to enter into
Transactions contemplated and
performance of its obligations
hereunder.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Incumbency Certificate (or, if Concurrently with the Yes
available the current authorized execution and delivery of
signature book or equivalent the Confirmation unless
authorizing documentation) previously delivered and
specifying the names, titles, still in full force and
authority and specimen effect.
signatures of the persons
authorized to
------------------------------ ---------------------------------- --------------------------- -----------------------
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------------------------------ ---------------------------------- --------------------------- -----------------------
execute the Confirmation
which sets forth the
specimen signatures of each
signatory to the Confirmation
signing on its behalf.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A The Guaranty of Swiss Concurrently with the No
Reinsurance Company ("Swiss Re") execution and delivery of
dated as of September 15, 2000, the Confirmation.
issued by Swiss Re as Party A's
Credit Support Provider (in the
form annexed hereto as Exhibit
A).
------------------------------ ---------------------------------- --------------------------- -----------------------
------------------------------ ---------------------------------- --------------------------- -----------------------
Party B The PSA Concurrently with the No
execution and delivery of
the Confirmation.
------------------------------ ---------------------------------- --------------------------- -----------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the Agreement:
Addresses for notices or communications to Party A and to Party B
shall be those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: none.
Party B appoints as its Process Agent: none.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:
Guaranty of Swiss Re dated as of September 15, 2000 in the form annexed
hereto as Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: none.
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(h) Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York
(without reference to conflicts of law provisions thereof).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall
be amended to include the following additional representations after paragraph
3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible
contract participant" as defined in Section 1a(12) of the U.S.
Commodity Exchange Act (7 U.S.C. 1a), as amended by the Commodity
Futures Modernization Act of 2000 and the Transaction evidenced
hereby has been the subject of individual negotiations and is
intended to be exempt from, or otherwise not subject to regulation
thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably
waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words
"or any of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or
there is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if
Party B has satisfied its payment obligations under Section 2(a)(i)
of the Agreement, then unless Party A is required pursuant to
appropriate proceedings to return to Party B or otherwise returns to
Party B upon demand of Party B any portion of such payment, (a) the
occurrence of an event described in Section 5(a) of the Agreement
with respect to Party B with respect to this Transaction shall not
constitute an Event of Default or Potential Event of Default with
respect to Party B as the Defaulting Party and (b) Party A shall be
entitled to designate an Early Termination Event pursuant to Section
6 of the Agreement only as a result of a Termination Event set forth
in either Section 5(b)(i) or Section 5(b)(ii) of the Agreement with
respect to Party A as the Affected Party or Section 5(b)(iii) of the
Agreement with respect to Party A as the Burdened Party. For purposes
of the Transaction to which this Confirmation relates, Party B's only
obligation under Section 2(a)(i) of the Agreement is to pay the Fixed
Amount on the Fixed Rate Payer Payment Date.
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(f) Trustee Capacity.
It is expressly understood and agreed by the parties hereto that
insofar as this Confirmation is executed by the Trustee (i) this
Confirmation is executed and delivered JPMorgan Chase Bank, not in
its individual capacity but solely as Trustee under the PSA in the
exercise of the powers and authority conferred and vested in it
thereunder and (iii) under no circumstances JPMorgan Chase Bank in
its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made
or undertaken under this Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party
unless (i) each party has given prior written consent to the party
and (ii) each of Standard and Poors, a Division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇")
and Fitch Ratings ("Fitch") have been provided notice of such
modification and confirms in writing (including by facsimile
transmission) within five Business Days after such notice is given
that it will not downgrade, withdraw or modify its then-current
rating of the C-BASS Mortgage Loan Asset Backed Certificates, Series
2002-CB6 (the "Certificates").
(h) Proceedings.
Party A shall not institute against or cause any other person to
institute against, or join any other person in instituting against,
the 2002-CB6 Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
federal or state bankruptcy, dissolution or similar law, for a period
of one year and one day following indefeasible payment in full of the
Certificates.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction; provided that
Floating Amount II shall be taken into account into any calculation
of amounts owing by Party A.
(j) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall
be the sole Transaction under the Agreement.
(k) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A
(or any applicable credit support provider), then Party A shall at
its own expense, (i) assign this Transaction hereunder to a third
party within (30) days of such Ratings Event that meets or exceeds,
or as to which any applicable credit support provider meets or
exceeds, the Approved Ratings Thresholds (as defined below) on terms
substantially similar to this Confirmation or (ii) deliver
collateral, in an amount equal to the Exposure (as defined below),
and an executed ISDA Credit Support Annex within (30) days of such
Ratings Event and subject
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to S&P's and Moody's written confirmation that delivery of such
collateral in the context of such downgrade will not result in a
withdrawal, qualification or downgrade of the then current ratings
assigned to the Certificates . For avoidance of doubt, a downgrade of
the rating on the Certificates could occur in the event that Party A
does not post sufficient collateral. For purposes of this
Transaction, a "Ratings Event" shall occur with respect to Party A
(or any applicable credit support provider), if its short-term
unsecured and unsubordinated debt ceases to be rated at least "A-1"
by S&P and at least "P-1" by Moody's (including in connection with a
merger, consolidation or other similar transaction by Party A or any
applicable credit support provider) such ratings being referred to
herein as the "Approved Ratings Thresholds," (unless, within 30 days
thereafter, each of Moody's and S&P has reconfirmed the ratings of
the Certificates, as applicable, which was in effect immediately
prior thereto. Only with respect to such Ratings Event, "Exposure"
shall mean the greater of the following: (i) the ▇▇▇▇-to-market value
of the Transaction as of the Valuation Date (as such term is defined
in the ISDA Credit Support Annex); (ii) the amount of the next
payment due under the Transaction and (iii) one percent of the
Notional Amount for the respective Calculation Period.
(l) Additional Termination Events
Additional Termination Events will apply if a Ratings Event has
occurred and Party A has not, within 30 days, complied with clause
(k) above, then an Additional Termination Event shall have occurred
with respect to Party A and Party A shall be the sole Affected Party
with respect to such an Additional Termination Event.
(m) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third
line thereof and inserting the word "first" in place thereof.
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Exhibit A
GUARANTY
The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely, unconditionally and irrevocably guaranties
the prompt payment as and when due of all present and future obligations of
its indirect, wholly-owned subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION,
a company incorporated in the State of Delaware ("THE GUARANTEED SUBSIDIARY")
including, without limitation, any obligation in any capacity under, in
connection with or ancillary to, contracts of insurance or reinsurance,
contracts for borrowed money and other evidences of indebtedness of any party,
however characterized, securities transactions, derivative, securitization and
alternative risk transfer transactions, any obligation in the nature of credit
extension, credit enhancement or contractual support, and any obligation
relating to transactions governed by ISDA Master Agreements entered into from
time to time by THE GUARANTEED SUBSIDIARY.
In the case of transactions governed by ISDA Master Agreements,
Guarantor's obligations under this Guaranty may be evidenced by and governed
in accordance with the terms of a subguaranty (a "Subguaranty"), substantially
in the form attached hereto.
This Guaranty constitutes a guaranty of payment when due and not of
collection and is not conditional or contingent upon any attempts to collect
from, or pursue or exhaust any rights or remedies against, THE GUARANTEED
SUBSIDIARY. A demand for payment hereunder may be made in writing addressed to
the Chief Financial Officer of the Guarantor.
Notwithstanding any reference to any obligation of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guaranty are its absolute
and independent obligations as a primary obligor and are in particular not
dependent in any way on the validity or enforceability of and are not subject
to any defense or excuse otherwise available under the guaranteed obligations
of THE GUARANTEED SUBSIDIARY (but no payment hereunder shall be required
unless the guaranteed obligations are due and payable in accordance with their
terms) and the Guaranty thereby constitutes and is intended by the parties to
constitute a non-accessory undertaking ("nicht akzessorische Verpflichtung")
within the meaning of Art. I I I of the Swiss Code of Obligations ("CO") and
not a mere surety ("Burgschaft") within the meaning of Art. 492 et seq. CO.
Upon payment by the Guarantor to any beneficiary of the amount due under
the Guarantee, the Guarantor shall be subrogated to the rights of the
beneficiary against THE GUARANTEED SUBSIDIARY to the extent satisfied by such
payment, and the beneficiary will take at the Guarantor's expense such steps
as the Guarantor may reasonably request to implement such subrogation. The
Guarantor shall not exercise any rights against THE GUARANTEED SUBSIDIARY
which it may acquire in consequence of such payment or subrogation unless and
until all the obligations of THE GUARANTEED SUBSIDIARY to such beneficiary
shall have been paid in full.
The Guarantor, and the signatories hereto acting jointly, hereby (i)
authorize THE GUARANTEED SUBSIDIARY to deliver copies of this Guaranty, and to
conclusively confirm its applicability to any transaction or obligation, to
such persons as it deems necessary or advisable, including, without
limitation, any counterparty to any transaction and any rating
U-13
agency engaged in providing a rating of THE GUARANTEED SUBSIDIARY or any of
its obligations or of any product offered or in any manner contractually
supported by THE GUARANTEED SUBSIDIARY and (ii) (a) authorize any one of the
Chief Executive Officer, the Chief Financial Officer and the Chief Risk
Officer of the Guarantor to execute in the name and on behalf of the
Guarantor, in favor of the counterparty to any ISDA Master Agreement entered
into by THE GUARANTEED SUBSIDIARY, and (b) authorize either such Member of the
Executive Board or THE GUARANTEED SUBSIDIARY to deliver to such counterparty a
Subguaranty issued under this Guaranty.
This Guaranty is governed and will be construed in accordance with Swiss
law. Exclusive place of jurisdiction for any legal proceeding hereunder shall
be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
in its name this 15th day of September, 2000.
SWISS REINSURANCE COMPANY
By: /EXECUTED
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /EXECUTED
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
U-14
EXHIBIT V
FORM OF CLASS B-1 CONFIRMATION
SWISS RE FINANCIAL PRODUCTS CORPORATION
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
DATE: December 23, 2002
TO: JPMorgan Chase Bank, not in its individual capacity,
but solely as Trustee for 2002-CB6 Trust
("Party B")
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Institutional Trust Services, C-BASS 2002-CB6
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FROM: Swiss Re Financial Products Corporation ("Party A")
RE: CORRIDOR TRANSACTION
Our Reference Number: 105087/105088
Dear Sir or Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between JPMorgan Chase Bank, as
Trustee (the "Trustee") pursuant to the Pooling and Servicing Agreement (the
"PSA"), dated as of December 1, 2002, among Financial Asset Securities Corp.
as depositor, Credit-Based Asset Servicing and Securitization LLC, as seller,
▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as trustee and Swiss Re
Financial Products Corporation (each a "party" and together "the parties") on
the Trade Date specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA (the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Definitions and this Confirmation, this
Confirmation will govern.
This letter agreement constitutes a "Confirmation" and the definitions
and provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992
V-1
(the "Master Agreement"), with the attached Schedule B as the Schedule to the
Master Agreement and the modifications provided below (collectively, the
"Agreement"). In the event of any inconsistency between the provisions of the
Master Agreement and this Confirmation and the attached Schedule B, this
Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the
parties as to the terms of the Transaction to which this Confirmation relates.
In addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and
not as agent when entering into the Transaction and in the case of
Party B, it is acting as Trustee when entering into the
Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own
account and, in the case of Party B, it is acting as Trustee, and
in the case of both parties, it has made its own independent
decisions to enter into the Transaction and as to whether the
Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a
recommendation to enter into the Transaction; it being understood
that information and explanations related to the terms and
conditions of the Transaction shall not be considered investment
advice or a recommendation to enter into the Transaction. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected
results of the Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Agreement and that Transaction. It is
also capable of assuming, and assumes, the financial and other
risks of the Agreement and that Transaction.
(iv) Status of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: See Amortization Schedule, Schedule A
Trade Date: December 18, 2002
Effective Date: December 23, 2002
Termination Date: February 25, 2006, subject to adjustment in
accordance with the Modified Following Business Day
Convention
Fixed Amounts:
V-2
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: December 23, 2002
Fixed Amount: USD 25,000.00
Floating Amounts I:
Floating Rate Payer: Party A
Cap Rate: See Schedule A
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing
January 25, 2003, through and including the
Termination Date, subject to adjustment in
accordance with the Modified Following Business Day
Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
Floating Amounts II:
Floating Rate Payer: Party B
Cap Rate: 6.25 percent
Floating Rate Payer Period End Dates: The 25th day of each month of each year commencing January 25, 2003,
through and including the Termination Date, subject to adjustment in
accordance with the Modified Following Business Day Convention
Floating Rate Payer Period Payment Dates: Two (2) Business Days prior to each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
V-3
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: ▇▇▇▇▇▇▇▇
Account of: Swiss Re Financial Products
Account No.: 066-911184
Account for payments to Party B: JPMorgan Chase Bank
New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account of: CBASS-2002-CB6
Account No.: ▇▇▇▇▇▇▇▇.3
5. Offices:
The Office of Party A for this Transaction is: New York
The Office of Party B for this Transaction is: New York
V-4
Please promptly confirm that the foregoing correctly sets forth the terms of
the Transaction entered into between us by executing this Confirmation and
returning it to us by facsimile to:
Swiss Re Financial Products Corporation
Attention: Derivatives Documentation
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇/5433
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: ________________________________________
Authorized Signatory
Accepted and confirmed as of the date first written above:
JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY,
BUT SOLELY AS TRUSTEE FOR 2002 CB6 TRUST
By: _______________________________________
Name:
Title:
V-5
Schedule A to the Confirmation dated as of December 23, 2002
Re: Reference Number 105087/105088
Amortization Schedule, subject to adjustment in accordance with the Modified
Following Business Day Convention
---------------------------------- -------------------------- -------------------------- -----------------------------
Notional Amount
From and including To but excluding (USD) Floating Amount I Cap Rate
---------------------------------- -------------------------- -------------------------- -----------------------------
December 23, 2002 January 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
January 25, 2003 February 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
February 25, 2003 March 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
March 25, 2003 April 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
April 25, 2003 May 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
May 25, 2003 June 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
June 25, 2003 July 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
July 25, 2003 August 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
August 25, 2003 September 25, 2003 12,773,000.00 2.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
September 25, 2003 October 25, 2003 12,773,000.00 3.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
October 25, 2003 November 25, 2003 12,773,000.00 3.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
November 25, 2003 December 25, 2003 12,773,000.00 3.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
December 25, 2003 January 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
January 25, 2004 February 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
February 25, 2004 March 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
March 25, 2004 April 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
April 25, 2004 May 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
May 25, 2004 June 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
June 25, 2004 July 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
July 25, 2004 August 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
August 25, 2004 September 25, 2004 12,773,000.00 4.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
September 25, 2004 October 25, 2004 12,773,000.00 5.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
October 25, 2004 November 25, 2004 12,773,000.00 5.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
November 25, 2004 December 25, 2004 12,773,000.00 5.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
December 25, 2004 January 25, 2005 12,773,000.00 5.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
January 25, 2005 February 25, 2005 12,773,000.00 5.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
February 25, 2005 March 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
March 25, 2005 April 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
April 25, 2005 May 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
May 25, 2005 June 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
June 25, 2005 July 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
July 25, 2005 August 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
August 25, 2005 September 25, 2005 12,773,000.00 5.50%
---------------------------------- -------------------------- -------------------------- -----------------------------
September 25, 2005 October 25, 2005 12,773,000.00 6.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
October 25, 2005 November 25, 2005 12,773,000.00 6.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
November 25, 2005 December 25, 2005 12,773,000.00 6.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
December 25, 2005 January 25, 2006 12,773,000.00 6.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
January 25, 2006 February 25, 2006 12,613,595.41 6.00%
---------------------------------- -------------------------- -------------------------- -----------------------------
V-6
V-7
Schedule B to the Confirmation dated as of December 23, 2002
Re: Reference Number 105087/105088
Between Swiss Re Financial Products Corporation ("Party A") and JPMorgan Chase
Bank, as Trustee (the "Trustee") pursuant to the Pooling and Servicing
Agreement (the "PSA"), dated as of December 1, 2002, among Financial Asset
Securities Corp. as depositor, Credit-Based Asset Servicing and Securitization
LLC, as seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer and the Trustee, as
trustee.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of
the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): none.
Section 5(a)(vi): none.
Section 5(a)(vii): none.
Section 5(b)(iv): none.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B.
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that where
there is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5),
(6) or, to the extent analogous thereto, (8), and the Defaulting Party is
governed by a system of law that does not permit termination to take
V-8
place after the occurrence of such Event of Default, then the Automatic
Early Termination provisions of Section 6(a) will apply.
If an Early Termination Date has occurred under Section 6(a) of the Agreement
as a result of Automatic Early Termination, and if the Non-defaulting Party
determines that it has either sustained or incurred a loss or damage or
benefited from a gain in respect of any Transaction, as a result of movement
in interest rates, currency exchange rates, other relevant rates or market
quotations between the Early Termination Date and the date upon which the
Non-defaulting Party first becomes aware that such Event of Default has
occurred under Section 6(a) of the Agreement, then (i) the amount of such loss
or damage shall be added to the amount due by the Defaulting Party or deducted
from the amount due by the Non-defaulting Party, as the case may be (in both
cases pursuant to Section 6(e)(i)(3) of the Agreement); or (ii) the amount of
such gain shall be deducted from the amount due by the Defaulting Party or
added to the amount due by the Non-defaulting Party, as the case may be (in
both cases pursuant to Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided in any
confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the Agreement,
Party A will make the following representation and Party B will not make
the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of the Agreement by reason of material prejudice
to its legal or commercial position.
Payee Representations. For the purpose of Section 3(f) of the Agreement,
Party A and Party B make the following representations:
V-9
(i) Party A represents that it is a corporation organized
under the laws of the State of Delaware.
(ii) Party B represents that it is the Trustee under the PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and
Party B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to Deliver Form/Document/
Document Certificate Date by which to be delivered
Party A and Party B Any form or document required or Promptly upon reasonable
reasonably requested to allow the demand by the other party.
other party to make payments under
the Agreement without any deduction
or withholding for or on account of
any Tax, or with such deduction or
withholding at a reduced rate.
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
------------------------------ ---------------------------------- --------------------------- -----------------------
Party Required to Deliver Form/Document/or Date by which to be Covered by Section
Document Certificate delivered 3(d) representation
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Certified copy of the Board of Concurrently with the Yes
Directors resolution (or execution and delivery of
equivalent authorizing the Confirmation
documentation) which sets forth
the authority of each signatory
to the Confirmation signing on
its behalf and the authority of
such party to enter into
Transactions contemplated and
performance of its obligations
hereunder.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A and Party B Incumbency Certificate (or, if Concurrently with the Yes
available the current authorized execution and delivery of
signature book or equivalent the Confirmation unless
authorizing documentation) previously delivered and
specifying the names, titles, still in full force and
authority and specimen effect.
signatures of the persons
authorized to
------------------------------ ---------------------------------- --------------------------- -----------------------
V-10
------------------------------ ---------------------------------- --------------------------- -----------------------
execute the Confirmation
which sets forth
the specimen signatures of each
signatory to the Confirmation
signing on its behalf.
------------------------------ ---------------------------------- --------------------------- -----------------------
Party A The Guaranty of Swiss Concurrently with the No
Reinsurance Company ("Swiss Re") execution and delivery of
dated as of September 15, 2000, the Confirmation.
issued by Swiss Re as Party A's
Credit Support Provider (in the
form annexed hereto as Exhibit
A).
------------------------------ ---------------------------------- --------------------------- -----------------------
------------------------------ ---------------------------------- --------------------------- -----------------------
Party B The PSA Concurrently with the No
execution and delivery of
the Confirmation.
------------------------------ ---------------------------------- --------------------------- -----------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the Agreement:
Addresses for notices or communications to Party A and to Party B
shall be those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: none.
Party B appoints as its Process Agent: none.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support
Document: Guaranty of Swiss Re dated as of September 15, 2000 in the
form annexed hereto as Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: none.
V-11
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
conflicts of law provisions thereof).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall
be amended to include the following additional representations after paragraph
3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
with respect to this Transaction shall not constitute an Event of Default
or Potential Event of Default with respect to Party B as the Defaulting
Party and (b) Party A shall be entitled to designate an Early Termination
Event pursuant to Section 6 of the Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened Party.
For purposes of the Transaction to which this Confirmation relates, Party
B's only obligation under Section 2(a)(i) of the Agreement is to pay the
Fixed Amount on the Fixed Rate Payer Payment Date.
V-12
(f) Trustee Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Trustee (i) this Confirmation is
executed and delivered JPMorgan Chase Bank, not in its individual capacity
but solely as Trustee under the PSA in the exercise of the powers and
authority conferred and vested in it thereunder and (iii) under no
circumstances JPMorgan Chase Bank in its individual capacity be personally
liable for the payment of any indebtedness or expenses or be personally
liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken under this Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
(i) each party has given prior written consent to the party and (ii) each
of Standard and Poors, a Division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"),
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and ▇▇▇▇▇ Ratings ("Fitch")
have been provided notice of such modification and confirms in writing
(including by facsimile transmission) within five Business Days after such
notice is given that it will not downgrade, withdraw or modify its
then-current rating of the C-BASS Mortgage Loan Asset Backed Certificates,
Series 2002-CB6 (the "Certificates").
(h) Proceedings.
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against, the 2002-CB6
Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy, dissolution or similar law, for a period of one year and one
day following indefeasible payment in full of the Certificates.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction; provided that Floating
Amount II shall be taken into account into any calculation of amounts
owing by Party A.
(j) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
(k) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party within
(30) days of such Ratings Event that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved Ratings
Thresholds (as defined below) on terms substantially similar to this
Confirmation or (ii) deliver collateral, in an amount equal to the
Exposure (as defined below), and an executed ISDA Credit Support Annex
within (30) days of such Ratings Event and subject
V-13
to S&P's and Moody's written confirmation that delivery of such collateral
in the context of such downgrade will not result in a withdrawal,
qualification or downgrade of the then current ratings assigned to the
Certificates . For avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that Party A does not post
sufficient collateral. For purposes of this Transaction, a "Ratings Event"
shall occur with respect to Party A (or any applicable credit support
provider), if its short-term unsecured and unsubordinated debt ceases to
be rated at least "A-1" by S&P and at least "P-1" by Moody's (including in
connection with a merger, consolidation or other similar transaction by
Party A or any applicable credit support provider) such ratings being
referred to herein as the "Approved Ratings Thresholds," (unless, within
30 days thereafter, each of Moody's and S&P has reconfirmed the ratings of
the Certificates, as applicable, which was in effect immediately prior
thereto. Only with respect to such Ratings Event, "Exposure" shall mean
the greater of the following: (i) the ▇▇▇▇-to-market value of the
Transaction as of the Valuation Date (as such term is defined in the ISDA
Credit Support Annex); (ii) the amount of the next payment due under the
Transaction and (iii) one percent of the Notional Amount for the
respective Calculation Period.
(l) Additional Termination Events
Additional Termination Events will apply if a Ratings Event has occurred
and Party A has not, within 30 days, complied with clause (k) above, then
an Additional Termination Event shall have occurred with respect to Party
A and Party A shall be the sole Affected Party with respect to such an
Additional Termination Event.
(m) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third line
thereof and inserting the word "first" in place thereof.
V-14
Exhibit A
GUARANTY
The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely, unconditionally and irrevocably guaranties
the prompt payment as and when due of all present and future obligations of
its indirect, wholly-owned subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION,
a company incorporated in the State of Delaware ("THE GUARANTEED SUBSIDIARY")
including, without limitation, any obligation in any capacity under, in
connection with or ancillary to, contracts of insurance or reinsurance,
contracts for borrowed money and other evidences of indebtedness of any party,
however characterized, securities transactions, derivative, securitization and
alternative risk transfer transactions, any obligation in the nature of credit
extension, credit enhancement or contractual support, and any obligation
relating to transactions governed by ISDA Master Agreements entered into from
time to time by THE GUARANTEED SUBSIDIARY.
In the case of transactions governed by ISDA Master Agreements,
Guarantor's obligations under this Guaranty may be evidenced by and governed
in accordance with the terms of a subguaranty (a "Subguaranty"), substantially
in the form attached hereto.
This Guaranty constitutes a guaranty of payment when due and not of
collection and is not conditional or contingent upon any attempts to collect
from, or pursue or exhaust any rights or remedies against, THE GUARANTEED
SUBSIDIARY. A demand for payment hereunder may be made in writing addressed to
the Chief Financial Officer of the Guarantor.
Notwithstanding any reference to any obligation of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guaranty are its absolute
and independent obligations as a primary obligor and are in particular not
dependent in any way on the validity or enforceability of and are not subject
to any defense or excuse otherwise available under the guaranteed obligations
of THE GUARANTEED SUBSIDIARY (but no payment hereunder shall be required
unless the guaranteed obligations are due and payable in accordance with their
terms) and the Guaranty thereby constitutes and is intended by the parties to
constitute a non-accessory undertaking ("nicht akzessorische Verpflichtung")
within the meaning of Art. I I I of the Swiss Code of Obligations ("CO") and
not a mere surety ("Burgschaft") within the meaning of Art. 492 et seq. CO.
Upon payment by the Guarantor to any beneficiary of the amount due under
the Guarantee, the Guarantor shall be subrogated to the rights of the
beneficiary against THE GUARANTEED SUBSIDIARY to the extent satisfied by such
payment, and the beneficiary will take at the Guarantor's expense such steps
as the Guarantor may reasonably request to implement such subrogation. The
Guarantor shall not exercise any rights against THE GUARANTEED SUBSIDIARY
which it may acquire in consequence of such payment or subrogation unless and
until all the obligations of THE GUARANTEED SUBSIDIARY to such beneficiary
shall have been paid in full.
The Guarantor, and the signatories hereto acting jointly, hereby (i)
authorize THE GUARANTEED SUBSIDIARY to deliver copies of this Guaranty, and to
conclusively confirm its applicability to any transaction or obligation, to
such persons as it deems necessary or advisable, including, without
limitation, any counterparty to any transaction and any rating
V-15
agency engaged in providing a rating of THE GUARANTEED SUBSIDIARY or any of
its obligations or of any product offered or in any manner contractually
supported by THE GUARANTEED SUBSIDIARY and (ii) (a) authorize any one of the
Chief Executive Officer, the Chief Financial Officer and the Chief Risk
Officer of the Guarantor to execute in the name and on behalf of the
Guarantor, in favor of the counterparty to any ISDA Master Agreement entered
into by THE GUARANTEED SUBSIDIARY, and (b) authorize either such Member of the
Executive Board or THE GUARANTEED SUBSIDIARY to deliver to such counterparty a
Subguaranty issued under this Guaranty.
This Guaranty is governed and will be construed in accordance with Swiss
law. Exclusive place of jurisdiction for any legal proceeding hereunder shall
be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
in its name this 15th day of September, 2000.
SWISS REINSURANCE COMPANY
By: /EXECUTED
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /EXECUTED
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
V-16
EXHIBIT W
FORM OF CERTIFICATION TO BE PROVIDED TO THE SERVICER BY THE TRUSTEE
[Servicer]
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2002-CB6
Reference is made to the Pooling and Servicing Agreement, dated as of
December 1, 2002 (the "Pooling Agreement"), by and among JPMorgan Chase Bank
(the "Trustee"), Credit-Based Asset Servicing and Securitization LLC, as
seller, ▇▇▇▇▇▇ Loan Servicing LP, as servicer (the "Servicer") and Financial
Asset Securities Corp., as depositor (the "Depositor"). The Trustee hereby
certifies to the the Servicer and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification,
that:
(i) The Trustee has 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, relating to the
above-referenced trust;
(ii) Subject to paragraph (iv), the distribution information in
the distribution reports contained in all Monthly Form 8-K's
included in the year covered by the annual report on Form
10-K for the calendar year [___], taken as a whole, does not
contain any untrue statement of a material fact or omit to
state a material fact required by the Pooling Agreement to be
included therein and 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;
(iii) The distribution information required to be provided by the
Trustee under the Pooling Agreement is included in these
reports.
(iv) In compiling the distribution information and making the
foregoing certifications, the Trustee has relied upon
information furnished to it by the Servicer under the
Agreement. The Trustee shall have no responsibility or
liability for any inaccuracy in such reports resulting from
information so provided by the Servicer.
Date:
JPMorgan Chase Bank, as Trustee
By: ____________________________
Name: ____________________________
Title: ____________________________
W-1
SCHEDULE I
PREPAYMENT PENALTY SCHEDULE
S-I-1