FINANCIAL ASSET SECURITIES CORP.,
Depositor
CHASE MANHATTAN MORTGAGE CORPORATION,
Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2003
----------
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates, Series 2003-FFC
================================================================================
Table of Contents
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms ............................................... 4
SECTION 1.02. Accounting .................................................. 43
SECTION 1.03. Allocation of Certain Interest Shortfalls ................... 43
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans ................................ 45
SECTION 2.02. Acceptance by Trustee ....................................... 48
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Seller .. 49
SECTION 2.04. Intentionally Omitted ....................................... 52
SECTION 2.05. Representations, Warranties and Covenants of the Servicer ... 52
SECTION 2.06. Representations and Warranties of the Depositor ............. 54
SECTION 2.07. Issuance of Certificates .................................... 55
SECTION 2.08. [Reserved] .................................................. 55
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance of
REMIC 2 and REMIC 3 by the Trustee; Issuance of Certificates 55
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer ................................. 57
SECTION 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers . 59
SECTION 3.03. Successor Sub-Servicers ..................................... 60
SECTION 3.04. Liability of the Servicer ................................... 60
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and the
Trustee or Certificateholders ............................... 60
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trustee ..................................................... 61
SECTION 3.07. Collection of Certain Mortgage Loan Payments ................ 61
SECTION 3.08. Sub-Servicing Accounts ...................................... 62
SECTION 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts .......................................... 62
SECTION 3.10. Collection Account and Distribution Account ................. 63
SECTION 3.11. Withdrawals from the Collection Account and Distribution
Account ..................................................... 66
i
SECTION 3.12. Investment of Funds in the Collection Account and the
Distribution Account ........................................ 68
SECTION 3.13. [Reserved] .................................................. 69
SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage ....................................... 69
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements ... 70
SECTION 3.16. Realization Upon Defaulted Mortgage Loans ................... 71
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files ............. 74
SECTION 3.18. Servicing Compensation ...................................... 75
SECTION 3.19. Reports to the Trustee; Collection Account Statements ....... 76
SECTION 3.20. Statement as to Compliance .................................. 76
SECTION 3.21. Independent Public Accountants' Servicing Report ............ 76
SECTION 3.22. Access to Certain Documentation; Filing of Reports by Trustee 77
SECTION 3.23. Title, Management and Disposition of REO Property ........... 79
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls ......................................... 82
SECTION 3.25. [Reserved] .................................................. 82
SECTION 3.26. Reserved .................................................... 82
SECTION 3.27. Solicitations ............................................... 82
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions ............................................... 84
SECTION 4.02. Reserved .................................................... 87
SECTION 4.03. Statements .................................................. 88
SECTION 4.04. Remittance Reports; Advances ................................ 91
SECTION 4.05. [Reserved] .................................................. 92
SECTION 4.06. The Policy .................................................. 92
SECTION 4.07. Distributions on the REMIC Regular Interests ................ 93
SECTION 4.08. Allocation of Realized Losses ............................... 95
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates ............................................ 97
SECTION 5.02. Registration of Transfer and Exchange of Certificates ....... 97
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates ........... 102
SECTION 5.04. Persons Deemed Owners ....................................... 103
SECTION 5.05. Appointment of Paying Agent ................................. 103
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor ................. 104
ii
SECTION 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor ............... 104
SECTION 6.03. Limitation on Liability of the Servicer and Others .......... 104
SECTION 6.04. Servicer Not to Resign ...................................... 105
SECTION 6.05. Delegation of Duties ........................................ 105
SECTION 6.06. Reserved .................................................... 106
SECTION 6.07. Inspection .................................................. 106
ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination .............................. 107
SECTION 7.02. Trustee to Act; Appointment of Successor .................... 108
SECTION 7.03. Waiver of Defaults .......................................... 110
SECTION 7.04. Notification to Certificateholders .......................... 110
SECTION 7.05. Survivability of Servicer Liabilities ....................... 110
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee ........................................... 111
SECTION 8.02. Certain Matters Affecting the Trustee ....................... 112
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans ....... 113
SECTION 8.04. Trustee May Own Certificates ................................ 114
SECTION 8.05. Trustee Fee and Expenses .................................... 114
SECTION 8.06. Eligibility Requirements for Trustee ........................ 115
SECTION 8.07. Resignation or Removal of Trustee ........................... 115
SECTION 8.08. Successor Trustee ........................................... 116
SECTION 8.09. Merger or Consolidation of Trustee .......................... 117
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee ............... 117
SECTION 8.11. Limitation of Liability ..................................... 118
SECTION 8.12. Trustee May Enforce Claims Without Possession of
Certificates ................................................ 118
SECTION 8.13. Suits for Enforcement ....................................... 119
SECTION 8.14. Waiver of Bond Requirement .................................. 119
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement ... 119
SECTION 8.16. Advance Facility ............................................ 119
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration ........................................ 121
SECTION 9.02. Prohibited Transactions and Activities ...................... 123
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss of
REMIC Status ................................................ 123
iii
ARTICLE X
TERMINATION
SECTION 10.01. Termination ................................................ 125
SECTION 10.02. Additional Termination Requirements ........................ 126
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment .................................................. 128
SECTION 11.02. Recordation of Agreement; Counterparts ..................... 129
SECTION 11.03. Limitation on Rights of Certificateholders ................. 129
SECTION 11.04. Governing Law; Jurisdiction ................................ 130
SECTION 11.05. Notices .................................................... 130
SECTION 11.06. Severability of Provisions ................................. 131
SECTION 11.07. Article and Section References ............................. 131
SECTION 11.08. Notice to the Rating Agencies .............................. 131
SECTION 11.09. Further Assurances ......................................... 132
SECTION 11.10. Benefits of Agreement ...................................... 132
SECTION 11.11. Acts of Certificateholders ................................. 132
SECTION 11.12. Rights of the Certificate Insurer .......................... 133
iv
Exhibits:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class S Certificates
Exhibit A-4 Form of Class M-1 Certificates
Exhibit A-5 Form of Class M-2 Certificates
Exhibit A-6 Form of Class M-3 Certificates
Exhibit A-7 Form of Class M-4 Certificates
Exhibit A-8 Form of Class C Certificates
Exhibit A-9 Form of Class P Certificates
Exhibit A-10 Form of Class R Certificates
Exhibit A-11 Form of Class X Certificates
Exhibit A-12 Form of Class R-X Certificates
Exhibit B Form of Mortgage Pool Insurance Policy
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Charged Off Loan Data Report
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of Annual Statement as to Compliance
Exhibit J Form of Investment Letter
Exhibit K Form of Transfer Affidavit for Residual Certificates
Exhibit L Form of Transferor Certificate
Exhibit M Form of ERISA Representation Letter
Exhibit N-1 Form of Certification to Be Provided by the Depositor with Form
10-K
Exhibit N-2 Form of Certification to Be Provided to Depositor by the Trustee
Exhibit N-3 Form of Certification to Be Provided to Depositor by the Servicer
Exhibit O Form of Cap Contract
Schedule I Prepayment Charge Schedule
Schedule II Class X Mortgage Loans
v
This Pooling and Servicing Agreement is dated as of June 1, 2003 (the
"Agreement"), among FINANCIAL ASSET SECURITIES CORP., as depositor (the
"Depositor"), CHASE MANHATTAN MORTGAGE CORPORATION, as servicer (the "Servicer")
and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, 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 ten classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class S Certificates, (iv) the Class M-1 Certificates,
(v) the Class M-2 Certificates, (vi) the Class M-3 Certificates, (vii) the Class
M-4 Certificates, (viii) the Class P Certificates, (ix) the Class C
Certificates, (x) the Class R Certificates, (xi) the Class R-X Certificates and
(xii) the Class X Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Group I Mortgage Loans, the Group II
Mortgage Loans and certain other related assets subject to this Agreement
(exclusive of the Net WAC Rate Carryover Reserve Account, the Cap Contract, the
Class X Mortgage Loans and any Servicer Prepayment Charge Payment Amounts) as a
real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC 1."
The Class R-1 Interest will represent the sole class of "residual interests" in
REMIC 1 for purposes of the REMIC Provisions (as defined herein) under federal
income tax law. The following table irrevocably sets forth the designation, the
Uncertificated REMIC 1 Pass-Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.
Uncertificated REMIC 1 Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
----------- ----------------- ----------------- ----------------
LT1A Variable(2) $85,644,143.68 November 25, 2032
LT1B Variable(2) $10,705,378.00 November 25, 2032
LT1C Variable(2) $10,705,377.00 November 25, 2032
LT1D Variable(2) $70,878,285.34 November 25, 2032
LT1E Variable(2) $ 8,859,622.00 November 25, 2032
LT1F Variable(2) $ 8,859,623.00 November 25, 2032
LT1P Variable(2) $ 100.00 November 25, 2032
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest possible maturity date has been
designated as the "latest possible maturity date" for each Uncertificated
REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The following table irrevocably sets forth
the designation, the Uncertificated REMIC 2 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular Interests
will be certificated.
Uncertificated REMIC 2 Initial Uncertificated Assumed Final Maturity
Designation Pass-Through Rate Principal Balance Date(1)
----------- ----------------- ----------------- -------
LT2AA Variable(2) $191,739,380.44 November 25, 2032
LT2A1 Variable(2) $ 853,760.00 November 25, 2032
LT2A2 Variable(2) $ 706,560.00 November 25, 2032
LT2M1 Variable(2) $ 215,220.00 November 25, 2032
LT2M2 Variable(2) $ 97,830.00 November 25, 2032
LT2M3 Variable(2) $ 53,800.00 November 25, 2032
LT2M4 Variable(2) $ 24,460.00 November 25, 2032
LT2S1 Variable(2) N/A(3) November 25, 2032
LT2S2 Variable(2) X/X(0) Xxxxxxxx 00, 0000
XX0XX Variable(2) $ 1,961,418.58 November 25, 2032
LT2P Variable(2) $ 100.00 November 25, 2032
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following the
maturity date for the Mortgage Loan with the latest possible maturity date
has been designated as the "latest possible maturity date" for each REMIC
2 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 2
Pass-Through Rate" herein.
(3) REMIC 2 Regular Interest LT2S1 will not have an Uncertificated Principal
Balance, but will accrue interest on its Uncertificated Notional Amount
outstanding from time to time which shall equal (i) with respect to the
1st Distribution Date through the 8th Distribution Date, the sum of the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B and
REMIC 1 Regular Interest LT1C and (ii) with respect to the 9th
Distribution Date through the 30th Distribution Date, the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1C. REMIC 2 Regular
Interest LT2S2 will not have an Uncertificated Principal Balance, but will
accrue interest on its Uncertificated Notional Amount outstanding from
time to time which shall equal (i) with respect to the 1st Distribution
Date through the 8th Distribution Date, the sum of the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1E and REMIC 1 Regular
Interest LT1F and (ii) with respect to the 9th Distribution Date through
the 30th Distribution Date, the Uncertificated Principal Balance of REMIC
1 Regular Interest LT1F.
2
REMIC 3
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 3 created hereunder:
Original Class Certificate Assumed Final Maturity
Class Designation Principal Balance Pass-Through Rate Date(1)
----------------- ----------------- ----------------- -------
Class A-1................ $85,376,000.00 Variable(2) November 25, 2032
Class A-2................ $70,656,000.00 Variable(2) November 25, 2032
Class S.................. N/A(3) Variable(2) November 25, 2032
Class M-1................ $21,522,000.00 Variable(2) November 25, 2032
Class M-2................ $ 9,783,000.00 Variable(2) November 25, 2032
Class M-3................ $ 5,380,000.00 Variable(2) November 25, 2032
Class M-4................ $ 2,446,000.00 Variable(2) November 25, 2032
Class C Interest......... $ 489,429.02(4) Variable(2) November 25, 2032
Class P Interest......... $ 100.00 N/A(5) November 25, 2032
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month immediately following the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
REMIC 2.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class S Certificates will receive all amounts distributed to REMIC 2
Regular Interest LT2S1 and REMIC 2 Regular Interest LT2S2.
(4) The Class C Interest will accrue interest at their variable Pass-Through
Rate on the Notional Amount of the Class C Interest outstanding from time
to time which shall equal the aggregate of the Uncertificated Principal
Balances of the REMIC 2 Regular Interests. The Class C Interest will not
accrue interest on its Class Certificate Principal Balance.
(5) The Class P Interest will not accrue interest.
3
REMIC 4
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class C Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for the
indicated Class of Certificates that represents a "regular interest" in REMIC 4
created hereunder:
Initial Aggregate
Certificate Principal Latest Possible
Class Designation Pass-Through Rate Balance Maturity Date(1)
----------------- ----------------- ------- ----------------
Class C Certificates Variable(2) $489,429.02 November 25, 2032
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loans with the latest maturity date has been designated
as the "latest possible maturity date" for the Class C Certificates.
(2) The Class C Certificates will receive 100% of amounts received in respect
of the Class C Interest.
4
REMIC 5
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class P Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 5." The Class R-5 Interest represents the sole class of
"residual interests" in REMIC 5 for purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for the
indicated Class of Certificates that represents a "regular interest" in REMIC 5
created hereunder:
Initial Aggregate
Certificate Principal Latest Possible
Class Designation Pass-Through Rate Balance Maturity Date(1)
----------------- ----------------- ------- ----------------
Class P Certificates Variable(2) $100.00 November 25, 2032
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loans with the latest maturity date has been designated
as the "latest possible maturity date" for the Class P Certificates.
(2) The Class P Certificates will receive 100% of amounts received in respect
of the Class P Interest.
5
GRANTOR TRUST FUND
As provided herein, the Trustee will elect to treat the segregated
pool of assets consisting of (i) the Class X Mortgage Loans and (ii) any Monthly
Payments or other recoveries on the Class X Mortgage Loans, as a Grantor Trust
for federal income tax purposes under subpart E, part I of subchapter J of the
Code and not as an association taxable as a corporation or as a partnership, and
such segregated pool of assets will be designated as the Grantor Trust Fund. The
following table sets forth (or describes) the Class designation, Pass-Through
Rate and Original Class Certificate Principal Balance for the Class of
Certificates that represents the interests in the Grantor Trust Fund.
Original Class Certificate
Class Designation Principal Balance Pass-Through Rate
----------------- ----------------- -----------------
Class X.................. N/A N/A
6
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, all
calculations in respect of interest on the Class A Certificates and the
Mezzanine Certificates shall be made on the basis of the actual number of days
elapsed and a 360-day year and all other calculations of interest described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. The Class P Certificates and the Residual Certificates are not entitled
to distributions in respect of interest and, accordingly, will not accrue
interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution
Account.
"Accrual Period": With respect to the Class A Certificates and the
Mezzanine Certificates and each Distribution Date, the period commencing on the
preceding Distribution Date (or in the case of the first such Accrual Period,
commencing on the Closing Date) and ending on the day preceding such
Distribution Date. With respect to the Class S Certificates and the Class C
Certificates and each Distribution Date, the calendar month prior to the month
of such Distribution Date.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or
the related REO Property), as of any date of determination, a per annum rate of
interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the
first day of the month preceding the month in which the related Distribution
Date occurs minus the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee
Rate and (iii) the Mortgage Pool Insurer Fee Rate, if applicable.
"Advance": As to any Mortgage Loan or REO Property, any advance made
by the Servicer in respect of any Distribution Date pursuant to Section 4.04.
"Advance Facility": As defined in Section 3.29 hereof.
"Advance Facility Trustee": As defined in Section 3.29 hereof.
"Advancing Person": As defined in Section 3.29 hereof.
"Advance Reimbursement Amounts": As defined in Section 3.29 hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
7
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution
Date and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on such Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on the Mortgage Loans on or prior to the related Determination
Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments,
proceeds from repurchases of and substitutions for such Mortgage Loans and other
unscheduled recoveries of principal and interest in respect of the Mortgage
Loans received during the related Prepayment Period, (c) the aggregate of any
amounts received in respect of a related REO Property withdrawn from any REO
Account and deposited in the Collection Account for such Distribution Date, (d)
the aggregate of any amounts deposited in the Collection Account by the Servicer
in respect of related Prepayment Interest Shortfalls for such Distribution Date,
(e) the aggregate of any Advances made by the Servicer for such Distribution
Date in respect of the Mortgage Loans, (f) the aggregate of any related advances
made by the Trustee in respect of the Mortgage Loans for such Distribution Date
pursuant to Section 7.02 and (g) the amount of any Prepayment Charges collected
by the Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Servicer Prepayment Charge Payment Amount over (ii) the
sum of (a) amounts reimbursable or payable to the Servicer pursuant to Section
3.11(a) or the Trustee pursuant to Section 3.11(b), (b) amounts deposited in the
Collection Account or the Distribution Account pursuant to clauses (a) through
(g) above, as the case may be, in error, (c) the amount of any Prepayment
Charges collected by the Servicer in connection with the full or partial
prepayment of any of the Mortgage Loans and any Servicer Prepayment Charge
Payment Amount, (d) the Trustee Fee payable from the Distribution Account
pursuant to Section 8.05, (e) the Mortgage Pool Insurer Fee payable from the
Distribution Account and (f) any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05.
8
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance of
a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that
is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of
the United States Code), as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A Certificates, the Class S Certificates and the Mezzanine
Certificates shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Arizona, the State of
Delaware, the State of New York, the State of Maryland, the State of California,
the State of Minnesota, or in the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order to
be closed.
"Cap Amount": The Cap Amount for the Class A Certificates and the
Mezzanine Certificates is equal to (i) the aggregate amount received by the
Trust from the Cap Contract multiplied by (ii) a fraction equal to (a) the
Certificate Principal Balance of such Class immediately prior to the applicable
Distribution Date divided by (b) the aggregate Certificate Principal Balance of
the Class A Certificates and the Mezzanine Certificates immediately prior to the
applicable Distribution Date.
"Cap Contract": The Cap Contract between Greenwich Capital
Derivatives, Inc. and the counterparty thereunder, assigned to the Trustee
pursuant to Section 2.01, a form of which is attached hereto as Exhibit O.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual
Certificate for any purpose hereof and, solely for the purposes of giving any
consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor or the Servicer or any Affiliate thereof shall be deemed not to be
outstanding and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent has been obtained, except as otherwise
provided in Section 11.01. The Trustee may conclusively rely upon a certificate
of the Depositor or the Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein
9
to "Holders" or "Certificateholders" shall reflect the rights of Certificate
Owners as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein; provided,
however, that the Trustee shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"Certificate Margin": With respect to the Class A-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.38%
per annum and (B) after the Optional Termination Date, 0.76% per annum. With
respect to the Class A-2 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.38% per annum and (B) after the Optional
Termination Date, 0.76% per annum. With respect to the Class M-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.80%
per annum and (B) after the Optional Termination Date, 1.30% per annum. With
respect to the Class M-2 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 1.85% per annum and (B) after the Optional
Termination Date, 2.35% per annum. With respect to the Class M-3 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 3.10%
per annum and (B) after the Optional Termination Date, 3.60% per annum. With
respect to the Class M-4 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 4.00% per annum and (B) after the Optional
Termination Date, 4.50% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Regular Certificates (other than the Class S Certificates and the Class C
Certificates) immediately prior to any Distribution Date, will be equal to the
Initial Certificate Principal Balance thereof reduced by (A) the sum of all
amounts actually distributed in respect of principal of such Class and (B) in
the case of a Mezzanine Certificate, Realized Losses allocated thereto on all
prior Distribution Dates. With respect to the Class C Certificates as of any
date of determination, an amount equal to the excess, if any, of (A) the then
aggregate Uncertificated Principal Balances of the REMIC 2 Regular Interests
over (B) the then aggregate Certificate Principal Balances of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates then
outstanding.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Charged Off Loan": Any Mortgage Loan for which coverage under the
Mortgage Pool Insurance Policy is not available that is charged off by the
Servicer pursuant to Section 3.16, no later than the date on which such Mortgage
Loan becomes 180 days delinquent.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.
10
"Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class A-1 Principal Distribution Amount
and (ii) the Class A-2 Principal Distribution Amount.
"Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class A-1 Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 59.50% and
(ii) the aggregate Stated Principal Balance of the Group I Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal received during the related Due Period and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal received during the related Due Period and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class A-2 Principal Distribution Amount": The excess of (x) the
Certificate Principal Balance of the Class A-2 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 59.50% and
(ii) the aggregate Stated Principal Balance of the Group II Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal received during the related Due Period and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal received during the related Due Period and unscheduled collections of
principal received during the related Prepayment Period) minus the related
Overcollateralization Floor.
"Class C Certificates": Any one of the Class C Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-8, representing the right
to distributions as set forth herein and therein and evidencing a Regular
Interest in REMIC 4 for purposes of the REMIC Provisions.
"Class C Interest": An uncertificated interest in the Trust Fund
held by the Trustee on behalf of the Holders of the Class C Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
11
"Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-1 Principal Distribution Amount": The excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 81.50% and (ii)
the Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal
received during the related Due Period and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal received during
the related Due Period and unscheduled collections of principal received during
the related Prepayment Period) minus the related Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-2 Principal Distribution Amount": The excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 91.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal received during the related Due Period and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal received during the related Due Period and unscheduled
collections of principal received during the related Prepayment Period) minus
the related Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-3 Principal Distribution Amount": The excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the
12
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 97.00% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal received during the related Due Period and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal received
during the related Due Period and unscheduled collections of principal received
during the related Prepayment Period) minus the related Overcollateralization
Floor.
"Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.
"Class M-4 Principal Distribution Amount": The excess of (x) the sum
of (i) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account the distribution of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the
distribution of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount on such Distribution
Date) and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 99.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal received during the related Due Period and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal received during the related Due Period and unscheduled
collections of principal received during the related Prepayment Period) minus
the related Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-9, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 5.
"Class P Interest": An uncertificated interest in the Trust Fund
held by the Trustee on behalf of the Holders of the Class P Certificates,
evidencing a Regular Interest in REMIC 3 for purposes of the REMIC Provisions.
13
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-10 and evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.
"Class R-X Certificate": The Class R-X Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-12 and evidencing the
ownership of the Class R-4 Interest and the Class R-5 Interest.
"Class R Interest": The Class R-1 Interest, the Class R-2 Interest
or the Class R-3 Interest.
"Class R-1 Interest": The uncertificated Residual Interest in
REMIC 1.
"Class R-2 Interest": The uncertificated Residual Interest in
REMIC 2.
"Class R-3 Interest": The uncertificated Residual Interest in
REMIC 3.
"Class R-4 Interest": The uncertificated Residual Interest in
REMIC 4.
"Class R-5 Interest": The uncertificated Residual Interest in
REMIC 5.
"Class X Certificate": Any one of the Class X Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-11, representing the right
to distributions as set forth herein and therein.
"Class X Mortgage Loans": The pool of Mortgage Loans set forth on
Schedule II, recoveries on which will be distributed directly to the Holders of
the Class X Certificates.
"Class S Certificates": Any one of the Class S Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-3, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC 3.
"Class S-1 Component": With respect to the 1st Interest Accrual
Period through the 30th Interest Accrual Period, REMIC 2 Regular Interest LT2S1.
"Class S-2 Component": With respect to the 1st Interest Accrual
Period through the 30th Interest Accrual Period, REMIC 2 Regular Interest LT2S2.
"Close of Business": As used herein, with respect to any Business
Day, 5:00 p.m. (New York time).
"Closing Date": June 26, 2003.
"Code": The Internal Revenue Code of 1986, as amended.
14
"Collection Account": A separate, segregated account or accounts
created and maintained by the Servicer pursuant to Section 3.10(a), which shall
be entitled "Chase Manhattan Mortgage Corporation, as servicer for Xxxxx Fargo
Bank Minnesota, National Association, as Trustee, in trust for registered
Holders of First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC," which must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Corporate Trust Office": The principal corporate trust office of
the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at (i) for Certificate transfer
purposes, Sixth and Marquette, MAC X 0000-000, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust Services--First Franklin Series 2003-FFC and (ii) for
all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Services--First Franklin Series 2003-FFC, 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.
"Corresponding Certificate": With respect to (i) REMIC 2 Regular
Interest LT2A1, (ii) REMIC 2 Regular Interest LT2A2, (iii) REMIC 2 Regular
Interest LT2M1, (iv) REMIC 2 Regular Interest LT2M2, (v) REMIC 2 Regular
Interest LT2M3, (vi) REMIC 2 Regular Interest LT2M4 and (vii) REMIC 0 Xxxxxxx
Xxxxxxxx XX0X, (x) the Class A-1 Certificates, (ii) the Class A-2 Certificates,
(iii) the Class M-1 Certificates, (iv) Class M-2 Certificates, (v) Class M-3
Certificates, (vi) the Class M-4 Certificates and (vii) Class P Certificates,
respectively.
"Credit Enhancement Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate Certificate Principal Balances of the Mezzanine Certificates and the
Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans, calculated prior to taking into account
payments of principal on the Mortgage Loans and distribution of the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount to
the Holders of the Certificates then entitled to distributions of principal on
such Distribution Date.
"Custodian": Xxxxx Fargo Bank Minnesota, National Association, as
custodian of the Mortgage Files, or any successor thereto.
"Cut-off Date": With respect to each Original Mortgage Loan, the
later of (i) the date of origination of such Mortgage Loan or (ii) June 1, 2003.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date of such Mortgage
Loan (or as of the applicable date of substitution with respect to a Qualified
Substitute Mortgage Loan), after giving effect to scheduled payments due on or
before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a
15
proceeding under the Bankruptcy Code, except such a reduction resulting from a
Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
by one or more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the aggregate Principal Balance of Mortgage Loans
Delinquent 60 days or more by (y) the aggregate Principal Balance of the
Mortgage Loans, in each case, as of the last day of the previous calendar month.
"Delinquent": With respect to any Mortgage Loan and related Monthly
Payment, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. For example, a
Mortgage Loan is 60 or more days Delinquent if the Monthly Payment due on a Due
Date is not made by the Close of Business on the second scheduled Due Date after
such Due Date.
"Depositor": Financial Asset Securities Corp., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York. Upon request, the Depository may also be Clearstream
Banking Luxembourg and the Euroclear System.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work
16
thereon or any use of such REO Property in a trade or business conducted by the
REMIC other than through an Independent Contractor; provided, however, that the
Trustee (or the Servicer on behalf of the Trustee) shall not be considered to
Directly Operate an REO Property solely because the Trustee (or the Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code,
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code or (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Residual Certificate by such Person may
cause any REMIC formed hereunder 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 the 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 organizations" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": A separate, segregated trust account or
accounts created and maintained by the Trustee pursuant to Section 3.10(b) which
shall be entitled "Distribution Account, Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered Certificateholders of First
Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed Certificates, Series
2003-FFC" and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in July 2003.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due (or, in the case of
any Mortgage Loan under the terms of which the Monthly Payment for such Mortgage
Loan was due on a day other than the first day of the calendar month in which
such Distribution Date occurs, the day during the related Due Period on which
such Monthly Payment was due), exclusive of any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
17
"Eligible Account": Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P and P-1 by Xxxxx'x (or comparable ratings if S&P and Xxxxx'x
are not the Rating Agencies) at the time any amounts are held on deposit
therein, (ii) with respect to any Escrow Account, an account or accounts the
deposits in which are fully insured by the FDIC (to the limits established by
such corporation), the uninsured deposits in which account are otherwise secured
such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to
each Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.
"Excess Overcollateralized Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on such Distribution Date over (ii) the Overcollateralization Target
Amount for such Distribution Date.
"Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such Distribution Date as reduced by
Realized Losses allocated thereto with respect to such Distribution Date
pursuant to Section 4.08 and (y) the Overcollateralization Deficiency Amount for
such Distribution Date.
"Xxxxxx Mae": Federal National Mortgage Association or any successor
thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Servicer pursuant to or as contemplated by
Section 2.03, 3.16(c) or 10.01), a determination made by the
18
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.
"Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, LIBOR plus the related Certificate
Margin.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Grantor Trust Fund": The segregated pool of assets subject hereto,
consisting of (i) the Class X Mortgage Loans and (ii) any recoveries on the
Class X Mortgage Loans. For federal income tax purposes, the Grantor Trust Fund
will not be an asset of any REMIC.
"Group I Allocation Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is (i) the
Group I Principal Remittance Amount for such Distribution Date, and the
denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Group I Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group I Principal Remittance Amount for
such Distribution Date over (ii) the product of (a) the Overcollateralization
Release Amount, if any, for such Distribution Date and (b) the Group I
Allocation Percentage.
"Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group I
Mortgage Loans.
"Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group I
with a principal balance that conforms to Xxxxxx Mae and Xxxxxxx Mac loan
limits.
"Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii) the product of (a) the Extra
Principal Distribution Amount for such Distribution Date and (b) the Group I
Allocation Percentage.
"Group I Principal Remittance Amount": With respect to any
Distribution Date, that portion of Available Funds equal to the sum of (i) each
scheduled payment of principal collected or advanced on the Group I Mortgage
Loans by the Servicer that were due during the related Due Period, (ii) the
principal portion of all partial and full principal prepayments of the Group I
Mortgage Loans applied by the Servicer during the related Prepayment Period,
(iii) the principal portion of all related Net Liquidation Proceeds and
Insurance Proceeds received during the related Prepayment Period with respect to
the Group I Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any repurchased Group I Mortgage Loan, deposited to
the Collection Account during the related Prepayment Period, (v) the principal
portion of any related Substitution
19
Adjustments deposited in the Collection Account during the related Prepayment
Period with respect to the Group I Mortgage Loans and (vi) on the Distribution
Date on which the Trust Fund is to be terminated pursuant to Section 10.01, that
portion of the Termination Price, in respect of principal on the Group I
Mortgage Loans.
"Group II Allocation Percentage": With respect to any Distribution
Date, the percentage equivalent of a fraction, the numerator of which is (i) the
Group II Principal Remittance Amount for such Distribution Date, and the
denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.
"Group II Basic Principal Distribution Amount": With respect to any
Distribution Date, the excess of (i) the Group II Principal Remittance Amount
for such Distribution Date over (ii) the product of (a) the
Overcollateralization Release Amount, if any, for such Distribution Date and (b)
the Group II Allocation Percentage.
"Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group II
with a principal balance that may or may not conform to Xxxxxx Mae and Xxxxxxx
Mac loan limits.
"Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the product of (a) the Extra
Principal Distribution Amount for such Distribution Date and (b) the Group II
Allocation Percentage.
"Group II Principal Remittance Amount": With respect to any
Distribution Date, that portion of Available Funds equal to the sum of (i) each
scheduled payment of principal collected or advanced on the Group II Mortgage
Loans by the Servicer that were due during the related Due Period, (ii) the
principal portion of all partial and full principal prepayments of the Group II
Mortgage Loans applied by the Servicer during the related Prepayment Period,
(iii) the principal portion of all related Net Liquidation Proceeds and
Insurance Proceeds received during the related Prepayment Period with respect to
the Group II Mortgage Loans, (iv) that portion of the Purchase Price,
representing principal of any repurchased Group II Mortgage Loan, deposited to
the Collection Account during the related Prepayment Period, (v) the principal
portion of any related Substitution Adjustments deposited in the Collection
Account during the related Prepayment Period with respect to the Group II
Mortgage Loans and (vi) on the Distribution Date on which the Trust Fund is to
be terminated pursuant to Section 10.01, that portion of the Termination Price,
in respect of principal on the Group II Mortgage Loans.
"Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Servicer or
any Affiliate thereof, and (c) is not connected with the Depositor or the
Servicer or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, partner, director or Person
20
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or the Servicer or any Affiliate thereof merely
because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Servicer or any Affiliate thereof, as
the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to any of the
REMICs created hereunder within the meaning of Section 856(d)(3) of the Code if
such REMIC were a real estate investment trust (except that the ownership tests
set forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35% or more of any Class of Certificates), so long as
each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Servicer) if the Trustee has received an
Opinion of Counsel to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code), or cause any
income realized in respect of such REO Property to fail to qualify as Rents from
Real Property.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.
"Insurance Proceeds": Proceeds of the Mortgage Pool Insurance Policy
(with respect to the Mortgage Loans covered thereby) and any title policy,
hazard policy or other insurance policy covering a Mortgage Loan and received in
or prior to the month of charge off, to the extent such proceeds are received by
the Servicer and are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Servicer would follow in servicing mortgage loans held for
its own account, subject to the terms and conditions of the related Mortgage
Note and Mortgage.
"Interest Determination Date": With respect to the Class A
Certificates and the Mezzanine Certificates and each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"LIBOR": With respect to each Accrual Period, the rate determined by
the Trustee on the related Interest Determination Date on the basis of the
London interbank offered rate for one-month United States dollar deposits, as
such rate appears on the Telerate Page
21
3750, as of 11:00 a.m. (London time) on such Interest Determination Date. If
such rate does not appear on Telerate Page 3750, the rate for such Interest
Determination Date will be determined on the basis of the offered rates of the
Reference Banks for one-month United States dollar deposits, as of 11:00 a.m.
(London time) on such Interest Determination Date. The Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. On such Interest Determination Date, LIBOR for the related Accrual
Period will be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period shall be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 1/16 of 1%); and
(ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period shall be the higher of (i) LIBOR as determined on the previous
Interest Determination Date and (ii) the Reserve Interest Rate.
"LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in its reasonable
judgment, as of the end of the related Prepayment Period, that all Liquidation
Proceeds which it expects to recover with respect to the liquidation of the
Mortgage Loan or disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full, (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or purchased
pursuant to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise or (iii) the repurchase, substitution or sale of a
Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03,
Section 3.16(c), Section 3.23 or Section 10.01.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan,
the fraction, expressed as a percentage, the numerator of which is the sum of
(a) the Principal Balance of the Mortgage Loan and (b) the Principal Balance of
the related senior lien and the denominator of which is the Value of the related
Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
22
"Loan Group I": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as the Group I Mortgage Loans.
"Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as the Group II Mortgage Loans.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost, misplaced or destroyed and
has not been 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.
"Marker Rate": With respect to the Class C Interest and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular Interest
LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2
Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3 REMIC 2 Regular Interest
LT2M4 and REMIC 2 Regular Interest LT2ZZ, with the rate on REMIC 2 Regular
Interest LT2A1 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-1 Certificates and (ii) the Net WAC Rate for
the purpose of this calculation; with the rate on REMIC 2 Regular Interest LT2A2
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class A-2 Certificates and (ii) the Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2M1 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-1
Certificates and (ii) the Net WAC Rate for the purpose of this calculation; with
the rate on REMIC 2 Regular Interest LT2M2 subject to a cap equal to the lesser
of (i) LIBOR plus the Certificate Margin of the Class M-2 Certificates and (ii)
the Net WAC Rate for the purpose of this calculation; with the rate on REMIC 2
Regular Interest LT2M3 subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class M-3 Certificates and (ii) the Net WAC Rate
for the purpose of this calculation; with the rate on REMIC 2 Regular Interest
LT2M4 subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-4 Certificates and (ii) the Net WAC Rate for the purpose
of this calculation; and with the rate on REMIC 2 Regular Interest LT2ZZ subject
to a cap of zero for the purpose of this calculation; provided, however, that
for this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate
and the related caps with respect to REMIC 2 Regular Interest LTA1, REMIC 2
Regular Interest LTA2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest
LT2M2, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular Interest LTM4 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Maximum Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 2 Pass-Through
23
Rate applicable to REMIC 2 Regular Interest LT2ZZ for such Distribution Date on
a balance equal to the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2ZZ minus the REMIC 2 Overcollateralization Amount, in each case for
such Distribution Date, over (b) Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2A1 with the rate on REMIC 2 Regular Interest LT2A1 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class A-1 Certificates and (ii) the Net WAC Rate for the purpose of this
calculation; Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2A2
with the rate on REMIC 2 Regular Interest LT2A2 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class A-2 Certificates
and (ii) the Net WAC Rate for the purpose of this calculation; Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2M1 with the rate on REMIC 2
Regular Interest LT2M1 subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class M-1 Certificates and (ii) the Net WAC Rate
for the purpose of this calculation; Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2M2 with the rate on REMIC 2 Regular Interest LT2M2 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class M-2 Certificates and (ii) the Net WAC Rate for the purpose of this
calculation; Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2M3
with the rate on REMIC 2 Regular Interest LT2M3 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-3 Certificates
and (ii) the Net WAC Rate for the purpose of this calculation for such
Distribution Date; and Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2M4 with the rate on REMIC 2 Regular Interest LT2M4 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-4
Certificates and (ii) the Net WAC Rate for the purpose of this calculation;
provided, however, that for this purpose, calculations of the Uncertificated
REMIC 2 Pass-Through Rate and the related caps with respect to REMIC 2 Regular
Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1,
REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3 and REMIC 2
Regular Interest LT2M4 shall be multiplied by a fraction, the numerator of which
is the actual number of days in the Accrual Period and the denominator of which
is 30.
"Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M-3 Certificate or Class M-4 Certificate.
"Monthly Interest Distributable Amount": With respect to the Class A
Certificates, the Class S Certificates, the Mezzanine Certificates and the Class
C Certificates and any Distribution Date, the amount of interest accrued during
the related Accrual Period at the related Pass-Through Rate on the Certificate
Principal Balance (or Notional Amount in the case of the Class S Certificates
and the Class C Certificates) of such Class immediately prior to such
Distribution Date, in each case, reduced by any Net Prepayment Interest
Shortfalls, Relief Act Interest Shortfalls and shortfalls resulting from
payments made under the Mortgage Pool Insurance Policy (allocated to such
Certificate based on its respective entitlements to interest irrespective of any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date). Notwithstanding the foregoing, for federal income tax
purposes and under the REMIC Provisions, the Monthly Interest Distributable
Amount for the Class S Certificates and any Distribution Date will be deemed to
be the Uncertificated Accrued Interest for REMIC 2 Regular Interest LT2S1 (with
respect to the Class S-1 Component) and the Uncertificated Accrued Interest for
REMIC 2 Regular Interest LT2S2 (with respect to the Class S-2 Component) for
such Distribution Date.
24
"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 3.07; and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc., or its successor in
interest.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, regarding the transfer of the Mortgage Loans by the Seller to
or at the direction of the Depositor, substantially in the form attached hereto
as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
included in REMIC 1 on such date, separately identifying the Group I Mortgage
Loans and the Group II Mortgage Loans, attached hereto as Exhibit D. The
Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan, as applicable:
(1) the Mortgage Loan identifying number;
(2) [reserved];
(3) the street address of the Mortgaged Property including the
state and zip code;
(4) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of origination, as
being owner-occupied;
(5) the type of Residential Dwelling constituting the Mortgaged
Property;
(6) the original months to maturity;
25
(7) the stated remaining months to maturity from the Cut-off Date
based on the original amortization schedule;
(8) the Loan-to-Value Ratio at origination;
(9) the Mortgage Rate;
(10) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(11) the stated maturity date;
(12) the amount of the Monthly Payment at origination;
(13) the amount of the Monthly Payment due on the first Due Date
after the Cut- off Date;
(14) the last Due Date on which a Monthly Payment was actually
applied to the unpaid Stated Principal Balance;
(15) the original principal amount of the Mortgage Loan;
(16) the Stated Principal Balance of the Mortgage Loan as of the
Close of Business on the Cut-off Date;
(17) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
(18) a code indicating the documentation program (i.e., full
documentation, limited income verification, no income
verification, alternative income verification);
(19) the risk grade;
(20) the Value of the Mortgaged Property;
(21) the sale price of the Mortgaged Property, if applicable;
(22) the actual unpaid principal balance of the Mortgage Loan as of
the Cut-off Date;
(23) the type and term of the related Prepayment Charge; and
(24) the program code.
The Mortgage Loan Schedule shall set forth the following information, with
respect to the Mortgage Loans in the aggregate and for each Loan Group as of the
Cut-off Date: (1) the
26
number of Mortgage Loans; (2) the current Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and (4) the
weighted average remaining term to maturity of the Mortgage Loans. The Mortgage
Loan Schedule shall be amended from time to time by the Servicer in accordance
with the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgage Pool Insurance Policy": The mortgage pool insurance policy
to be maintained in accordance with Section 3.13 (or any replacement policy
therefor obtained pursuant to such Section 3.13), together with all endorsements
thereto. The form of the Mortgage Pool Insurance Policy is attached hereto as
Exhibit B.
"Mortgage Pool Insurer": Xxxxxx Guaranty Corporation, an Illinois
corporation, or any successor thereto or the named insurer in any replacement
policy obtained pursuant to Section 3.13.
"Mortgage Pool Insurer Fee": The monthly premium payable on each
Distribution Date in respect of the Mortgage Loans covered under the Mortgage
Pool Insurance Policy which shall be an amount equal to one twelfth of the
product of (i) the Mortgage Pool Insurer Fee Rate, multiplied by (ii) the
aggregate Principal Balance of the Mortgage Loans and any REO Properties covered
by the Mortgage Pool Insurance Policy as of the first day of the related Due
Period (after giving effect to scheduled payments of principal received during
the Due Period relating to the previous Distribution Date).
"Mortgage Pool Insurer Fee Rate": 1.86% per annum.
"Mortgage Rate": With respect to each Mortgage Loan, the rate set
forth in the related Mortgage Note.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of a fee simple estate in a parcel
of real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property), the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees or ancillary income received in or prior to the month of
charge-off and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
27
"Net Monthly Excess Cashflow": With respect to each Distribution
Date, the sum of (a) any Overcollateralization Release Amount for such
Distribution Date and (b) the excess of (x) Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Class A Certificates, the Class S
Certificates and the Mezzanine Certificates, (B) the Unpaid Interest Shortfall
Amounts for the Class A Certificates and the Class S Certificates and (C) the
Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for
such date over the related Compensating Interest.
"Net WAC Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, a per annum rate equal to the
product of (x) the weighted average of the Adjusted Net Mortgage Rates of the
Mortgage Loans, weighted on the basis of the outstanding Principal Balances of
the Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date less the sum of (a) the Pass-Through Rate for the Class S-1
Component for such Distribution Date multiplied by a fraction, the numerator of
which is the Notional Amount of the Class S-1 Component immediately prior to
such Distribution Date and the denominator of which is the outstanding Principal
Balances of the Group I Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date and (b) the Pass-Through Rate for
the Class S-2 Component for such Distribution Date multiplied by a fraction, the
numerator of which is the Notional Amount of the Class S-2 Component immediately
prior to such Distribution Date and the denominator of which is the outstanding
Principal Balances of the Group II Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Accrual Period. For federal income tax purposes, the
economic equivalent of such rate shall be expressed as the weighted average of
the Uncertificated REMIC 2 Pass-Through Rate on each of the REMIC 2 Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC 2 Regular Interest.
"Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest accrued on such Class
of Certificates on such Distribution Date calculated at the related Formula
Rate, over (ii) the amount of interest accrued on such Class of Certificates at
the Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid, together with
interest thereon at a rate equal to the related Formula Rate for such Class of
Certificates for such Distribution Date and for such Accrual Period.
"Net WAC Rate Carryover Reserve Account": The account established
and maintained pursuant to Section 4.06.
28
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not be
ultimately recoverable from Late Collections, Insurance Proceeds or Liquidation
Proceeds of such Mortgage Loan or REO Property as provided herein. Any Advances
or Servicing Advances relating to Mortgage Loans that are charged off pursuant
to Section 3.16(a) hereof shall be deemed to be Nonrecoverable Advances.
"Notional Amount": With respect to the Class S-1 Component and (a)
the 1st Distribution Date through the 8th Distribution Date, an amount equal to
the sum of the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B
and REMIC 1 Regular Interest LT1C immediately prior to such Distribution Date
and (b) the 9th Distribution Date through the 30th Distribution Date, an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C.
For federal income tax purposes, the Class S-1 Component will not have a
Notional Amount, but will be entitled to 100% of amounts distributed on REMIC 2
Regular Interest LT2S1.
With respect to the Class S-2 Component and (a) the 1st Distribution
Date through the 8th Distribution Date, an amount equal to the sum of the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E and REMIC 1
Regular Interest LT1F immediately prior to such Distribution Date and (b) the
9th Distribution Date through the 30th Distribution Date, an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Xxxxxxxx XX0X. For federal
income tax purposes, the Class S-2 Component will not have a Notional Amount,
but will be entitled to 100% of amounts distributed on REMIC 2 Regular Interest
LT2S1.
With respect to the Class C Interest immediately prior to any
Distribution Date, the aggregate of the Uncertificated Principal Balances of
REMIC 2 Regular Interests (other than REMIC 2 Regular Interest LT2S1 and REMIC 2
Regular Interest LT2S2).
"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, acceptable
to the Trustee, except that any opinion of counsel relating to (a) the
qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Terminator may opt to terminate the Trust Fund pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Certificates, the
Class C Interest, the Class P
29
Certificates and the Class P Interest, the corresponding amounts set forth
opposite such Class above in the Preliminary Statement.
"Original Group I Mortgage Loan": Any of the Group I Mortgage Loans
included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Original Group I Mortgage Loans as of the Cut-off Date is equal
to $107,054,998.68.
"Original Group II Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Original Group II Mortgage Loans as of the Cut-off Date is equal
to $88,597,530.34.
"Original Mortgage Loan": The Original Group I Mortgage Loans and
the Original Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.
"Original Notional Amount": With respect to the Class S-1 Component,
$21,410,755. With respect to the Class S-2 Component, $17,719,245. With respect
to the Class C Interest, $195,652,529.02.
"Originator": First Franklin Financial Corporation, a Delaware
corporation, or its successor in interest.
"Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).
"Overcollateralization Floor": With respect to the Class A-1
Certificates, $267,637.50. With respect to the Class A-2 Certificates,
$221,493.83. With respect to the Mezzanine Certificates, $489,131.32.
"Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.
"Overcollateralization Step Up Event": With respect to any
Distribution Date, an Overcollateralization Step Up Event is in effect if the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Due Period divided by the aggregate Principal Balance of
the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set
forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
----------------------------------------- --------------------------------------------------------
July 2006 through June 2007 5.00% for the first month, plus an additional
1/12th of 2.00% for each month thereafter.
July 2007 through June 2008 7.00% for the first month, plus an additional
1/12th of 2.50% for each month thereafter.
July 2008 through June 2009 9.50% for the first month, plus an additional
1/12th of 1.50% for each month thereafter.
July 2009 and thereafter 11.00% for each month.
30
"Overcollateralization Target Amount": With respect to any
Distribution Date
(A) on which an Overcollateralization Step Up Event is not in
effect, an amount equal to 0.25% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date; or
(B) on which an Overcollateralization Step Up Event is in effect, an
amount equal to (i) prior to the Stepdown Date, 1.05% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date, (ii) on or after the
Stepdown Date so long as a Trigger Event is not in effect, the greater of (a)
2.10% of the then current aggregate outstanding Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal received during the related Due Period and
unscheduled collections of principal received during the related Prepayment
Period) and (b) 0.25% of the aggregate Principal Balance of the Mortgage Loans
as of the Cut-off Date or (iii) on or after the Stepdown Date and if a Trigger
Event is in effect, the greater of (a) the Overcollateralization Target Amount
for the immediately preceding Distribution Date and (b) the greater of (i) 2.10%
of the then current aggregate outstanding Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal received during the related Due Period and
unscheduled collections of principal received during the related Prepayment
Period) and (ii) 0.25% of the aggregate Principal Balance of the Mortgage Loans
as of the Cut-off Date.
"Overcollateralized Amount": For any Distribution Date, the amount
equal to (i) the aggregate Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal received during the related Due Period and unscheduled collections of
principal received during the related Prepayment Period) minus (ii) the sum of
the aggregate Certificate Principal Balance of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates as of such Distribution Date
after giving effect to distributions to be made on such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to the Class A Certificates and
the Mezzanine Certificates and any Distribution Date, the lesser of (x) the
Formula Rate for such Distribution Date and (y) the Net WAC Rate for such
Distribution Date.
With respect to the Class S-1 Component and the Class S-2 Component,
a per annum rate equal to 6.00% for the 1st Distribution Date through the 30th
Distribution Date and 0.00% thereafter. For federal income tax purposes, the
Class S-1 Component and Class S-2 Component will not have Pass-Through Rates,
but will be entitled to 100% of amounts distributed on REMIC 2 Regular Interest
LT2S1 and REMIC 2 Regular Interest LT2S2, respectively.
31
With respect to the Class C Interest and any Distribution Date, a
per annum rate equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(I) below, and the denominator of which is the aggregate of the Uncertificated
Principal Balances of the REMIC 2 Regular Interests. For purposes of calculating
the Pass-Through Rate for the Class C Certificates, the numerator is equal to
the sum of the following components:
(A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2AA;
(B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A1;
(C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A2;
(D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M1;
(E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M2;
(F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M3;
(G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M4;
(H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2ZZ; and
(I) 100% of the interest on the REMIC 2 Regular Interest LT2P.
With respect to the Class C Certificates, 100% of the interest
distributable to the Class C Interest, expressed as a per annum rate.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
32
"Percentage Interest": With respect to any Certificate (other than a
Residual Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Notional Amount
represented by such Certificate and the denominator of which is the Original
Class Certificate Principal Balance or Original Notional Amount of the related
Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, that the sum of all such percentages for each
such Class totals 100%.
"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 agent acting in
their respective commercial capacities) incorporated under the laws of the
United States of America or any state thereof and subject to supervision
and examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company (or, if the only
Rating Agency is S&P, in the case of the principal depository institution
in a depository institution holding company, debt obligations of the
depository institution holding company) or its ultimate parent has a
short-term uninsured debt rating in one of the two highest available
ratings of Xxxxx'x and the highest available rating category of S&P and
provided that each such investment has an original maturity of no more
than 365 days; and provided further that, if the only Rating Agency is S&P
and if the depository or trust company is a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not
separately rated, the applicable rating shall be that of the bank holding
company; and, provided further that, if the original maturity of such
short- term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating
of such institution shall be A-1+ in the case of S&P if S&P is the Rating
Agency; and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(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
P-1 by Xxxxx'x and rated A-1+ or higher by S&P, provided, however, that
collateral transferred pursuant to such repurchase obligation must be of
the type described in clause (i) above and must (A) be valued daily at
current market prices plus accrued interest, (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred by the
Trustee in exchange for such collateral and (C) be delivered to the
Trustee or, if the Trustee is supplying the collateral, an agent for the
Trustee, in such a
33
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 a Rating Agency in
its highest long-term unsecured rating category at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by a Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds, including those money market funds
managed or advised by the Trustee or its Affiliates, that have been rated
"Aaa" by Xxxxx'x and "AAA" by S&P; 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, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans
and arrangements, including individual retirement accounts and annuities, Xxxxx
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA or Section 4975 of the Code.
"Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans in both Loan Groups as of such date.
"Prepayment Assumption": As defined in the Prospectus Supplement.
34
"Prepayment Charge": With respect to any Mortgage Loan, the charges
or premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Servicer
Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges on the Mortgage Loans included in the Trust Fund on such date, attached
hereto as Schedule I (including the Prepayment Charge Summary attached thereto).
The Prepayment Charge Schedule shall set forth the following information with
respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
"Prepayment Interest Excess": With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment in full
during the portion of the related Prepayment Period occurring between the first
day and the Determination Date of the calendar month in which such Distribution
Date occurs, an amount equal to interest (to the extent received) at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
number of days commencing on the first day of the calendar month in which such
Distribution Date occurs and ending on the date on which such prepayment is so
applied.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day of the related Prepayment Period and the last day of the calendar
month preceding the month in which such Distribution Date occurs, an amount
equal to interest at the applicable Net Mortgage Rate on the amount of such
Principal Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the calendar month preceding
the month in which such Distribution Date occurs.
"Prepayment Period": With respect to any Distribution Date, the
period commencing on the day after the Determination Date in the calendar month
preceding the calendar month in which such Distribution Date occurs (or, in the
case of the first Distribution Date, commencing on June 1, 2003) and ending on
the Determination Date of the calendar month in which such Distribution Date
occurs.
"Principal Balance": As to any Mortgage Loan other than a Liquidated
Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus
all collections credited as
35
principal against the Cut-off Date Principal Balance of any such Mortgage Loan.
For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to
have a Principal Balance equal to the Principal Balance of the related Mortgage
Loan as of the final recovery of related Liquidation Proceeds and a Principal
Balance of zero thereafter. As to any REO Property and any day, the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due with respect to such principal on any Due Date
in any month or months subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, the sum of the Group I Principal Remittance Amount and the Group II
Principal Remittance Amount.
"Prospectus Supplement": That certain Prospectus Supplement dated
June 24, 2003 relating to the public offering of the Class A Certificates, the
Class S Certificates and the Mezzanine Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c)
or Section 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 Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Servicer, which payment or advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, and (y) an REO
Property, the sum of (1) accrued interest on such Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.04, (iii) any unreimbursed Servicing Advances and Advances
and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.23 and (v) in the case
of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Servicer or the Trustee in respect
of the breach or defect giving rise to the purchase obligation, including any
costs and damages incurred by the Trust Fund in connection with any violation by
such loan of any predatory or abusive lending law.
36
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx.
"Qualified Pool Insurer": A mortgage guaranty insurance company duly
qualified, to the extent required by applicable law, as such under the laws of
the state of its organization and each other state having jurisdiction over the
insurer in connection with the Mortgage Pool Insurance Policy, duly authorized
and licensed, to the extent required by applicable law, by the insurance
regulatory authority of the state of its organization and each such other state,
to transact mortgage guaranty insurance business in the state of its
organization and each such other state and to write the insurance provided by
the Mortgage Pool Insurance Policy, and approved as an insurer by Xxxxxx Mae and
Xxxxxxx Mac or having a claims paying ability rating of at least "AA" or
equivalent rating by at least two nationally recognized statistical rating
organizations. Any replacement insurer with respect to the Mortgage Pool
Insurance Policy must be acceptable to the Rating Agencies as evidenced by
written acknowledgment from each Rating Agency that such replacement will not
cause a reduction, withdrawal or cancellation of the Ratings of the
Certificates.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement or the
Mortgage Loan Purchase Agreement which must, on the date of such substitution,
(i) have an outstanding principal balance (or in the case of a substitution of
more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal
balance), after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of, and not more
than 5% less than, the outstanding principal balance of the Deleted Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) have a Mortgage Rate not less than (and not more than one
percentage point in excess of) the Mortgage Rate of the Deleted Mortgage Loan,
(iii) have a remaining term to maturity not greater than (and not more than one
year less than) that of the Deleted Mortgage Loan, (iv) be current as of the
date of substitution, (v) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (vi) have a risk grading determined by the
Originator at least equal to the risk grading assigned on the Deleted Mortgage
Loan, (vii) have been underwritten or reunderwritten by the Originator in
accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan and (viii) conform to each representation and warranty set forth
in Section 3.01 of the Mortgage Loan Purchase Agreement applicable to the
Deleted Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be satisfied
for each such mortgage loan, the risk gradings described in clause (vi) hereof
shall be satisfied as to each such mortgage loan, the terms described in clause
(iii) hereof shall be determined on the basis of weighted average remaining term
to maturity (provided that no such mortgage loan may have a remaining term to
maturity longer than the Deleted Mortgage Loan), the Loan-to-Value Ratios
described in clause (v) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (viii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.
"Rating Agency or Rating Agencies": Xxxxx'x and S&P or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be such nationally
37
recognized statistical rating agencies, or other comparable Persons, designated
by the Depositor, notice of which designation shall be given to the Trustee and
Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all Net Liquidation Proceeds in respect of such
Mortgage Loan. Any Charged Off Loan will give rise to a Realized Loss at the
time it is charged off, as described in Section 3.16 hereof.
"Record Date": With respect to (i) the Class A Certificates and the
Mezzanine Certificates, the Close of Business on the Business Day immediately
preceding the related Distribution Date and (ii) the Class S Certificates, the
Class P Certificates, the Class C Certificates and the Residual Certificates,
the Close of Business on the last Business Day of the calendar month preceding
the month in which the related Distribution Date occurs; provided, however, that
following the date on which Definitive Certificates for a Class A Certificate or
a Mezzanine Certificate are available pursuant to Section 5.02, the Record Date
for such Certificates shall be the last Business Day of the calendar month
preceding the month in which the related Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Originator, the Seller, the Servicer or any affiliate
thereof and (iii) which have been designated as such by the Trustee; provided,
however, that if fewer than two of such banks provide a LIBOR rate, then any
leading banks selected by the Trustee which are engaged in transactions in
United States dollar deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property.
"Regular Certificate": Any of the Class A Certificates, Class S
Certificates, Mezzanine Certificates, Class C Certificates or Class P
Certificates.
"Reimbursement Amount": As defined in Section 3.29.
"Released Loan": Any Charged Off Loan that is released by the
Servicer to the Holders of the Class X Certificates pursuant to Section 3.16,
generally on the date that is six months after the date on which the Servicer
begins using non-foreclosure collection procedures on such Charged Off Loans.
All Released Loans will no longer be an asset of the Trust Fund.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Relief Act, the amount by which (i)
interest collectible on such Mortgage Loan during such Due Period is less than
(ii) one month's interest on the Principal Balance of such Mortgage Loan at the
Mortgage Rate for such Mortgage Loan before giving effect to the application of
the Relief Act.
38
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights under
the Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) the Mortgage Pool Insurance Policy and (vi) the Collection
Account, the Distribution Account (subject to the last sentence of this
definition) and any REO Account and such assets that are deposited therein from
time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, a REMIC election will not be made with respect to the Class X Mortgage
Loans, the Cap Contract or the Net WAC Rate Carryover Reserve Account.
"REMIC 1 Regular Interest LT1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1C": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1D": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
39
"REMIC 1 Regular Interest LT1E": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1F": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1F shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1P": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to any Prepayment Charges
collected by the Servicer and to a distribution of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F and REMIC 1
Regular Interest LT1P.
"REMIC 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2AA minus the Marker Rate, divided by (b) 12.
"REMIC 2 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.
"REMIC 2 Overcollateralization Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 2 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2
Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4 and REMIC 2 Regular
Interest LT2P, in each case as of such date of determination.
"REMIC 2 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Principal
Balance of the Mortgage Loans and related REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular
40
Interest LT2M2, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular Interest
LT2M4 and the denominator of which is the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 1 Regular Interest LT2M2, REMIC 2
Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4 and REMIC 2 Regular
Interest LT2ZZ.
"REMIC 2 Regular Interest LT2AA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2AA
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2A1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2A2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2M1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2M2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2M3": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M3
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
41
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2M4": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M4
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2P": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2P shall
accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interest LT2S1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2S2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2S2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.
"REMIC 2 Regular Interest LT2ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2ZZ
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2AA, REMIC 2
Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2
Regular Interest LT2M4, REMIC 2 Regular Interest LT2S1, REMIC 2 Regular Interest
LT2S2, REMIC 2 Regular Interest LT2ZZ and REMIC 2 Regular Interest LT2P.
"REMIC 3": The segregated pool of assets consisting of all of the
REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit of
the Holders of the Regular Certificates and the Class R Certificates (in respect
of the Class R-3 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
42
"REMIC 4": The segregated pool of assets consisting of all of the
Class C Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R-X Certificate (in respect of
the Class R-4 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 5": The segregated pool of assets consisting of all of the
Class P Interest conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R-X Certificate (in respect of
the Class R-5 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests, the REMIC
2 Regular Interests, the Class C Interest and the Class P Interest.
"Remittance Report": A report prepared by the Servicer and delivered
to the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar
month during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for
any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether in
the form of rental income, sale proceeds (including, without limitation, that
portion of the Termination Price paid in connection with a purchase of all of
the Mortgage Loans and REO Properties pursuant to Section 10.01 that is
allocable to such REO Property) or otherwise, net of any portion of such amounts
(i) payable pursuant to Section 3.23 in respect of the proper operation,
management and maintenance of such REO Property or (ii) payable or reimbursable
to the Servicer pursuant to Section 3.23 for unpaid Servicing Fees in respect of
the related Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO
43
Property or the related Mortgage Loan, over (b) the REO Imputed Interest in
respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/16 of 1%) of the one-month United States dollar lending rates which banks in
The City of New York selected by the Depositor are quoting on the relevant
Interest Determination Date to the principal London offices of leading banks in
the London interbank market or (ii) in the event that the Trustee can determine
no such arithmetic mean, in the case of any Interest Determination Date after
the initial Interest Determination Date, the lowest one-month United States
dollar lending rate which such New York banks selected by the Depositor are
quoting on such Interest Determination Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Xxxxxx Xxx eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Certificate": The Class R Certificates and the Class R-X
Certificates.
"Residual Interest": The sole class of "residual interests" in a
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, any vice president, any assistant vice president,
the Secretary, any assistant secretary, the Treasurer, any assistant treasurer,
the Cashier, any assistant cashier, any trust officer or assistant trust
officer, the Controller and any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and, with respect to a particular matter, to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"Seller": Greenwich Capital Financial Products, Inc., a Delaware
corporation, in its capacity as Seller under the Mortgage Loan Purchase
Agreement.
44
"Servicer": Chase Manhattan Mortgage Corporation, a New Jersey
corporation, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Certification": As defined in Section 3.22(b).
"Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Servicer Prepayment Charge Payment Amount": The amounts payable by
the Servicer in respect of any waived Prepayment Charges pursuant to Section
2.05 or Section 3.01.
"Servicer Remittance Date": With respect to any Distribution Date,
the Business Day prior to such Distribution Date.
"Servicing Advance Reimbursement Amount": As defined in Section
3.29.
"Servicing Advances": All customary, reasonable and necessary
"out-of-pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.14, 3.16, and 3.23. The Servicer shall
not be required to make any Servicing Advance that would be a Nonrecoverable
Advance.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to the Servicing Fee Rate accrued for such month
(or in the event of any Principal Prepayment in full made by the Mortgagor
during such month, the Servicing Fee Rate accrued for the number of days covered
by the payment of interest accompanying the Principal Prepayment in full), on
the same principal amount on which interest on such Mortgage Loan accrues for
such month. A portion of such Servicing Fee may be retained by any Sub-Servicer
as its servicing compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee and the Depositor on the Closing Date, as such list may
from time to time be amended.
"Servicing Standard": Shall mean the standards set forth in Section
3.01.
"Servicing Transfer Costs": Shall mean all reasonable costs and
expenses incurred by the Trustee in connection with the transfer of servicing
from a predecessor servicer, including, without limitation, any reasonable costs
or expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to
45
enable the Trustee (or any successor servicer appointed pursuant to Section
7.02) to service the Mortgage Loans properly and effectively.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a)
as of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such Mortgage
Loan would be distributed, the outstanding principal balance of such Mortgage
Loan as of the Cut-off Date as shown in the Mortgage Loan Schedule, minus the
sum of (i) the principal portion of each Monthly Payment due on a Due Date
subsequent to the Cut-off Date to the extent received from the Mortgagor or
advanced by the Servicer and distributed pursuant to Section 4.01 on or before
such date of determination, (ii) all Principal Prepayments received after the
Cut-off Date to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Due Period for
the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the related
Mortgage Loan as of the date on which such REO Property was acquired on behalf
of the Trust Fund, minus the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stepdown Date": The earlier to occur of (i) the Distribution Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in July 2006 and (y) the first Distribution Date on which the
Credit Enhancement Percentage (calculated for this purpose only after taking
into account payments of principal on the Mortgage Loans and distribution of the
Group I Principal Distribution Amount and the Group II Principal Distribution
Amount to the Certificates then entitled to distributions of principal on such
Distribution Date) is equal to or greater than 40.50%.
"Sub-Servicer": Any Person with which either Servicer has entered
into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the applicable Servicer.
46
"Sub-Servicing Agreement": The written contract between either
Servicer and a Sub- Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Terminator": As defined in Section 10.01(a) hereof.
"Trigger Event": A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if:
(a) the Delinquency Percentage exceeds 21.00% of the Credit
Enhancement Percentage; or
(b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by the
aggregate principal balance of the Original Mortgage Loans as of the Cut-off
Date exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ----------------------------------------------
July 2006 through June 2007 8.00% for the first month, plus an
additional 1/12th of 2.50% for each month
thereafter.
July 2007 through June 2008 10.50% for the first month, plus an
additional 1/12th of 2.00% for each month
thereafter.
July 2008 through June 2009 12.50% for the first month, plus an
additional 1/12th of 0.50% for each month
thereafter.
July 2009 through June 2010 13.00% for the first month, plus an
additional 1/12th of 1.00% for each month
thereafter.
July 2010 and thereafter 14.00% for each month.
"Trust": First Franklin Mortgage Loan Trust 2003-FFC, the trust
created hereunder.
47
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1, REMIC 2 and REMIC 3, REMIC 4, REMIC 5,
the Class X Mortgage Loans, the Grantor Trust Fund, the Cap Contract, the Net
WAC Rate Carryover Reserve Account.
"Trustee": Xxxxx Fargo Bank Minnesota, National Association, a
national banking association, or any successor trustee appointed as herein
provided.
"Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee Fee Rate and
(ii) the aggregate Principal Balance of the Mortgage Loans and any REO
Properties (after giving effect to scheduled payments of principal received
during the related Due Period relating to the previous Distribution Date and
unscheduled collections of principal received during the related Prepayment
Period).
"Trustee Fee Rate": 0.02% per annum.
"Unadjusted Net WAC 30/360 Rate": For any Distribution Date, a per
annum rate equal to the weighted average of the Adjusted Net Mortgage Rates of
the Mortgage Loans for such Distribution Date.
"Uncertificated Accrued Interest": With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance or Uncertificated Notional Amount of such REMIC
Regular Interest. In each case, Uncertificated Accrued Interest will be reduced
by any Net Prepayment Interest Shortfalls, Relief Act Interest Shortfalls and
shortfalls resulting from payments made under the Mortgage Pool Insurance Policy
(allocated to such REMIC Regular Interests based on their respective
entitlements to interest irrespective of any Net Prepayment Interest Shortfalls,
Relief Act Interest Shortfalls and shortfalls resulting from payments made under
the Mortgage Pool Insurance Policy for such Distribution Date).
"Uncertificated Notional Amount": With respect to REMIC 2 Regular
Interest LT2S1 and (i) the 1st Distribution Date through the 8th Distribution
Date, the sum of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1B and REMIC 1 Regular Interest LT1C for such Distribution Date and
(ii) the 9th Distribution Date through the 30th Distribution Date, the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C for such
Distribution Date. With respect to REMIC 2 Regular Interest LT2S2 and (i) the
9th Distribution Date through the 30th Distribution Date, the sum of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1E and REMIC 1
Regular Interest LT1F for such Distribution Date and (ii) the 9th Distribution
Date through the 30th Distribution Date, the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1F for such Distribution Date.
"Uncertificated Principal Balance": With respect to each REMIC
Regular Interest (other than REMIC 2 Regular Interest LT2S1 and REMIC 2 Regular
Interest LT2S2), the amount of such REMIC Regular Interest outstanding as of any
date of determination. As of the Closing Date,
48
the Uncertificated Principal Balance of each REMIC Regular Interest (other than
REMIC 2 Regular Interest LT2S1 and REMIC 2 Regular Interest LT2S2) shall equal
the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC Regular Interest shall be reduced by all
distributions of principal made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.07 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.08, and the Uncertificated Principal Balance of
REMIC 2 Regular Interest LT2ZZ shall be increased by interest deferrals as
provided in Section 4.07. With respect to the Class C Interest as of any date of
determination, an amount equal to the excess, if any, of (A) the then aggregate
Uncertificated Principal Balances of the REMIC 1 Regular Interests over (B) the
then aggregate Certificate Principal Balances of the Class A Certificates,
Mezzanine Certificates and the Class P Interest then outstanding. The
Uncertificated Principal Balance of each REMIC Regular Interest that has an
Uncertificated Principal Balance shall never be less than zero. REMIC 2 Regular
Interest LT2S1 and REMIC 2 Regular Interest LT2S2 will not have Uncertificated
Principal Balances.
"Uncertificated REMIC 1 Pass-Through Rate": For any Distribution
Date and each REMIC 1 Regular Interest, the Unadjusted Net WAC 30/360 Rate of
the Mortgage Loans for such Distribution Date.
"Uncertificated REMIC 2 Pass-Through Rate": With respect to REMIC 2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2
Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4 and REMIC 2 Regular
Interest LT2P and (A) the 1st Distribution Date through the 9th Distribution
Date, a per annum rate equal to the weighted average of (x) the Uncertificated
REMIC 1 Pass-Through Rate on REMIC 1 Regular 1 Regular Interest LT1A , REMIC 1
Regular 1 Regular Interest LT1D and REMIC 1 Regular 1 Regular Interest LT1P,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
1 Regular Interest as of the first day of the month preceding the month of such
Distribution Date and (y) the excess, if any, of (1) the Uncertificated REMIC 1
Pass-Through Rate on each of REMIC 1 Regular Interest LT1B, REMIC 1 Regular
Interest LT1C, REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest LT1F
over (2) 6.00% per annum, in each case, weighted on the basis of each such REMIC
1 Regular Interest's Uncertificated Principal Balance, (B) the 10th Distribution
Date through the 30th Distribution Date, a per annum rate equal to the weighted
average of (x) the Uncertificated REMIC 1 Pass-Through Rate on REMIC 1 Regular 1
Regular Interest LT1A , REMIC 1 Regular 1 Regular Interest LT1B, REMIC 1 Regular
1 Regular Interest LT1D, REMIC 1 Regular 1 Regular Interest LT1E and REMIC 1
Regular 1 Regular Interest LT1P, weighted on the basis of the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest as of the first day of
the month preceding the month of such Distribution Date and (y) the excess, if
any, of (1) the Uncertificated REMIC 1 Pass-Through Rate on each of REMIC 1
Regular Interest LT1C and REMIC 1 Regular Interest LT1F over (2) 6.00% per
annum, in each case, weighted on the basis of each such REMIC 1 Regular
Interest's Uncertificated Principal Balance, and (C) thereafter, the weighted
average the Uncertificated REMIC 1 Pass-Through Rate on the REMIC 1 Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest as of the first day of the month preceding the
month of such Distribution Date.
49
With respect to REMIC 2 Regular Interest LT2S1 and REMIC 2 Regular
Interest LT2S2, for the 1st Distribution Date through the 30th Distribution
Date, a per annum rate equal to 6.00%, and for any Distribution Date thereafter,
0.00% per annum.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies required to be maintained pursuant to Section 3.14.
"United States Person" or "U.S. Person": A citizen or resident of
the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Residual Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates, the Class S Certificates and the Mezzanine Certificates and (i)
the first Distribution Date, zero, and (ii) any Distribution Date after the
first Distribution Date, the amount, if any, by which (a) the sum of (1) the
Monthly Interest Distributable Amount for such Class for the immediately
preceding Distribution Date and (2) the outstanding Unpaid Interest Shortfall
Amount, if any, for such Class for such preceding Distribution Date exceeds (b)
the aggregate amount distributed on such Class in respect of interest pursuant
to clause (a) of this definition on such preceding Distribution Date, plus
interest on the amount of interest due but not paid on the Certificates of such
Class on such preceding Distribution Date, to the extent permitted by law, at
the Pass-Through Rate for such Class for the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i)
the lesser of (a) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage Loan
by an appraiser who met the minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac,
and (b) the value thereof as determined by a review appraisal conducted by the
Originator in the event any such review appraisal determines an appraised value
ten percent or more lower than the value thereof as determined by the appraisal
referred to in clause (i)(a) above and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the lesser of (1) the value
determined by an appraisal made for the Originator of such Refinanced Mortgage
Loan at the time of origination of such Refinanced Mortgage Loan by an appraiser
who met the minimum
50
requirements of Xxxxxx Mae and Xxxxxxx Mac and (2) the value thereof as
determined by a review appraisal conducted by the Originator in the event any
such review appraisal determines an appraised value ten percent or more lower
than the value thereof as determined by the appraisal referred to in clause
(ii)(1) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
97% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class S Certificates shall have 1% of the Voting
Rights, the Class P Certificates shall have 1% of the Voting Rights and the
Residual Certificates shall have 1% of the Voting Rights. The Voting Rights
allocated to any Class of Certificates (other than the Class P Certificates and
the Residual Certificates) shall be allocated among all Holders of each such
Class in proportion to the outstanding Certificate Principal Balance or Notional
Amount of such Certificates and the Voting Rights allocated to the Class P
Certificates and the Residual Certificates shall be allocated among all Holders
of each such Class in proportion to such Holders' respective Percentage
Interest; provided, however that when none of the Regular Certificates are
outstanding, 100% of the Voting Rights shall be allocated among Holders of the
Residual Certificates in accordance with such Holders' respective Percentage
Interests in the Certificates of such Class. The Class X Certificates shall have
no Voting Rights.
SECTION 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or added
or any distributions are taken into account such definition or calculation and
any related definitions or calculations shall be determined without duplication
of such functions.
SECTION 1.03. Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Class S Certificates, the
Mezzanine Certificates and the Class C Certificates for any Distribution Date,
(1) the aggregate amount of any Net Prepayment Interest Shortfalls, any Relief
Act Interest Shortfalls and shortfalls resulting from payments made under the
Mortgage Pool Insurance Policy incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, among the Class C Certificates on a
pro rata basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
and, thereafter, among the Class A Certificates, the Class S Certificates and
the Mezzanine Certificates on a pro rata basis based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Certificate Principal Balance or Notional Amount of each such
Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate
Carryover Reserve Amounts incurred for any Distribution Date shall be allocated
among the Class C Certificates on a pro rata basis based on, and to the extent
of, one month's interest at the then applicable Pass-Through Rate on the
Notional Amount of each such Certificate.
51
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls, any Relief Act
Interest Shortfalls and shortfalls resulting from payments made under the
Mortgage Pool Insurance Policy incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first to REMIC 1 Regular Interest LT1A and
then to REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1E and REMIC 1 Regular
Interest LT1F, in each case to the extent of one month's interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls, any Relief Act
Interest Shortfalls and shortfalls resulting from payments made under the
Mortgage Pool Insurance Policy incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 2 Regular Interest LT2AA and REMIC 2 Regular Interest LT2ZZ up
to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 2 Regular Interest LT2AA, REMIC
2 Regular Interest LTA1, REMIC 2 Regular Interest LTA2, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2
Regular Interest LTM4 and REMIC 2 Regular Interest LT2ZZ pro rata based on, and
to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC 2 Regular Interest.
52
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans, (iv) its interest in
the Mortgage Pool Insurance Policy; (v) the rights of the Depositor under the
Mortgage Loan Purchase Agreement, (vi) the right to receive any amounts payable
under the Cap Contract; (vii) all other assets included or to be included in the
Trust Fund and (viii) all proceeds of any of the foregoing. Such assignment
includes all interest and principal due and collected by the Depositor or the
Servicer after the Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor, does
hereby deliver to, and deposit with the Trustee, or its designated agent (the
"Custodian"), the following documents or instruments with respect to each
Original Mortgage Loan so transferred and assigned (with respect to each
Mortgage Loan, a "Mortgage File"):
(i) the original Mortgage Note, endorsed either (A) in blank, in
which case the Trustee shall cause the endorsement to be completed or (B)
in the following form: "Pay to the order of Xxxxx Fargo Bank Minnesota,
National Association, as Trustee, without recourse" or with respect to any
lost Mortgage Note, an original Lost Note Affidavit stating that the
original mortgage note was lost, misplaced or destroyed, together with a
copy of the related mortgage note; provided, however, that such
substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date
Principal Balance of which is less than or equal to 1.00% of the Pool
Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted for recording but
has not been returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such Mortgage or power
of attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
53
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank or (B) to
"Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse";
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
The Depositor herewith also delivers to the Trustee an executed copy
of the Mortgage Loan Purchase Agreement and the Mortgage Pool Insurance Policy.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.01(v) above, the Depositor shall deliver or
cause to be delivered to the Trustee or the Custodian, the original or a copy of
a written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original or a certified copy
thereof to be delivered to the Trustee or the Custodian, promptly upon receipt
thereof. The Servicer or the Depositor shall deliver or cause to be delivered to
the Trustee or the Custodian promptly upon receipt thereof any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Trustee
shall enforce the obligations of the Seller under the Mortgage Loan Purchase
Agreement to cure such defect or deliver such missing document to the Trustee or
the Custodian within 120 days. If the Seller does not cure such defect or
deliver such missing document within such time period, the Trustee shall enforce
the obligations of the Seller to either repurchase or substitute for such
Mortgage Loan in accordance with Section 2.03.
The Trustee shall enforce the obligations of the Seller under the
Mortgage Loan Purchase Agreement to cause the Assignments which were delivered
in blank to be completed and to record all Assignments referred to in Section
2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof. The
Trustee shall enforce the obligations of the Seller under the Mortgage
54
Loan Purchase Agreement to deliver such assignments for recording within 180
days of the Closing Date. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Trustee shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to promptly
have a substitute Assignment prepared or have such defect cured, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless the Trustee and the
Depositor receives notice that such failure to record would result in a
withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates; provided, however, each Assignment shall be submitted for
recording by the Seller in the manner described above, at no expense to the
Trust Fund or Trustee, upon the earliest to occur of: (i) reasonable direction
by the Holders of Certificates entitled to at least 25% of the Voting Rights,
(ii) the occurrence of a Servicer Event of Termination, (iii) the occurrence of
a bankruptcy, insolvency or foreclosure relating to the Seller, (iv) the
occurrence of a servicing transfer as described in Section 7.02 hereof, (v) upon
receipt of notice from the Servicer, the occurrence of a bankruptcy, insolvency
or foreclosure relating to the Mortgagor under the related Mortgage and (vi)
upon receipt of notice from the Servicer, any Mortgage Loan that is 90 days or
more Delinquent. In the event of (i) through (iv) set forth in the immediately
preceding sentence, and upon receipt of notice by a Responsible Officer of the
Trustee from the Servicer of the occurrence of (v) or (vi) set forth in the
immediately preceding sentence, the Trustee shall enforce the obligations of the
Seller to deliver such Assignments for recording as provided above, promptly and
in any event within 30 days following receipt of notice by the Seller from the
Trustee or the Servicer, as applicable. Notwithstanding the foregoing, if the
Seller fails to pay the cost of recording the Assignments, such expense will be
paid by the Trustee and the Trustee shall be reimbursed for such expenses by the
Trust. The Servicer shall not be deemed to be in breach of its obligation to
service in accordance with the Servicing Standard by any delay in its servicing
activities resulting from the failure to submit the Assignments for recording.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date, the Trustee shall cause such
endorsements to be completed (at the Seller's expense) as follows: "Pay to the
order of Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse."
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 365 days of its submission for recordation. In the event that
the Servicer cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Servicer shall deliver to the
Custodian, within such 365 day period, an Officers' Certificate of the Servicer
which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due
55
solely to a delay caused by the public recording office, (C) state the amount of
time generally required by the applicable recording office to record and return
a document submitted for recordation, if known and (D) specify the date the
applicable recorded document is expected to be delivered to the Custodian, and,
upon receipt of a copy of such document certified by the public recording
office, the Servicer shall immediately deliver such document to the Custodian.
In the event the appropriate public recording office will not certify as to the
accuracy of such document, the Servicer shall deliver a copy of such document
certified by an officer of the Servicer to be a true and complete copy of the
original to the Custodian.
SECTION 2.02. Acceptance by Trustee.
Subject to the provisions of Section 2.01 and subject to the review
described below and any exceptions noted on the exception report described in
the next paragraph below, the Trustee acknowledges receipt of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor and the Servicer on or prior to the
Closing Date an acknowledgment of receipt of either (i) the related original
Mortgage Note or (ii) a Lost Note Affidavit, for each Mortgage Loan (with any
exceptions noted), substantially in the form attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders, to
review, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date (or, with respect to any document
delivered after the Startup Day, within 45 days of receipt and with respect to
any Qualified Substitute Mortgage, within 45 days after the assignment thereof).
The Trustee further agrees, for the benefit of the Certificateholders, to
certify to the Depositor and the Servicer in substantially the form attached
hereto as Exhibit F-1, within 45 days after the Closing Date (or, with respect
to any document delivered after the Startup Day, within 45 days of receipt and
with respect to any Qualified Substitute Mortgage, within 45 days after the
assignment thereof) that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents required to be delivered to it
pursuant Section 2.01 of this Agreement are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged or torn
and appear on their face to relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1) and (2) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File. It
is herein acknowledged that, in conducting such review, the Trustee (or the
Custodian, as applicable) is under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, legally enforceable, valid or binding or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face.
56
Prior to the first anniversary date of this Agreement the Trustee
shall deliver (or cause the Custodian to deliver) to the Depositor and the
Servicer a final certification in the form annexed hereto as Exhibit F-2, with
any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) finds any document or documents constituting a
part of a Mortgage File to be missing or 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 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 Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially adversely affects such Mortgage Loan or the interests of the
related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties to this Agreement.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by 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 in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee shall promptly notify the Seller
of such defect, missing document or breach and request that the Seller deliver
such missing document or that the Seller cure such defect or breach within 120
days from the date the Seller was notified of such missing document, defect or
breach, and if the Seller does not deliver such missing document or if the
Seller does not 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 period, if the Seller has commenced to cure such
breach within such 120 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 remitted to the Servicer for deposit
in the Collection Account, and the Trustee, upon receipt of written
certification from the Servicer of such
57
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 (it being understood
that the Trustee shall have no responsibility for determining the sufficiency of
such assignment for its intended purpose). In lieu of repurchasing any such
Mortgage Loan as provided above, the Seller may cause such Mortgage Loan to be
removed from the Trust Fund (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d). It is
understood and agreed that the obligation of 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) Within 90 days of the earlier of discovery by the Depositor or
receipt of notice by the Depositor of the breach of any representation, warranty
or covenant of the Depositor set forth in Section 2.06, which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Depositor shall cure such breach in all material respects.
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Deleted Mortgage Loan for which the Seller substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Seller delivering to the Trustee, for such Qualified Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage and the Assignment to the Trustee, and
such other documents and agreements, with all necessary endorsements thereon, as
are required by Section 2.01, together with an Officers' Certificate providing
that each such Qualified Substitute Mortgage Loan satisfies the definition
thereof and specifying the Substitution Adjustment (as described below), if any,
in connection with such substitution. The Trustee shall acknowledge receipt for
such Qualified Substitute Mortgage Loan or Loans and, within 45 days thereafter,
shall review such documents as specified in Section 2.02 and deliver to the
Depositor and the Servicer, with respect to such Qualified Substitute Mortgage
Loan or Loans, a certification substantially in the form attached hereto as
Exhibit F-1, with any applicable exceptions noted thereon. Within one year of
the date of substitution, the Trustee shall deliver to the Depositor and the
Servicer a certification substantially in the form of Exhibit F-2 hereto with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Fund and will be retained by the Seller. For the month of substitution,
distributions to Certificateholders will reflect the collections and recoveries
in respect of such Deleted Mortgage Loan in the Due Period preceding the month
of substitution and the Seller shall thereafter be entitled to retain all
amounts subsequently received in respect of such Deleted Mortgage Loan. the
Seller shall give or cause to be given written notice to
58
the Trustee, who shall forward such notice to the Certificateholders, that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Agreement and
the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution by the Seller, such Qualified Substitute Mortgage Loan or Loans
shall constitute part of the Mortgage Pool and shall be subject in all respects
to the terms of this Agreement and the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof included in the
Mortgage Loan Purchase Agreement as of the date of substitution.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the
aggregate, as to each such Qualified Substitute Mortgage Loan, of the Principal
Balance thereof as of the date of substitution, together with one month's
interest on such Principal Balance at the applicable Mortgage Rate. On the date
of such substitution, 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, if any, and the Trustee, upon receipt of the related
Qualified Substitute Mortgage Loan or Loans and certification by the Servicer of
such deposit, shall release to the 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 Deleted 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)(I) of the Code or on "contributions after the startup date" under
Section 860G(d)(I) of the Code or (b) any REMIC to fail to qualify as a REMIC at
any time that any Certificate is outstanding. If such Opinion of Counsel can not
be delivered, then such substitution may only be effected at such time as the
required Opinion of Counsel can be given.
(e) Upon discovery by the Depositor, the Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall
within two Business Days give written notice thereof to the other parties
hereto. In connection therewith, the Seller or the Depositor, as the case may
be, shall repurchase or, subject to the limitations set forth in Section
2.03(d), substitute one or more Qualified Substitute Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt of
such notice with respect to such affected Mortgage Loan. Such repurchase or
substitution shall be made (i) by the Seller if the affected Mortgage Loan's
status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the Seller under the Mortgage Loan
Purchase Agreement or (ii) the Depositor, if the affected Mortgage Loan's status
as a non-qualified mortgage is a breach of any representation or warranty of the
Depositor set forth in Section 2.06, or if its status as a non-qualified
mortgage is a breach of no representation or warranty. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a) or
2.03(d), if made by the Seller, or Section 2.03(b), if made by the Depositor.
The Trustee shall reconvey to the Depositor or the Seller, as the case may
59
be, the Mortgage Loan to be released pursuant hereto in the same manner, and on
the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, 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 and is
licensed, qualified and in good standing in the states where the Mortgaged
Property is located (or is otherwise exempt under applicable law from such
qualification) 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) and all documents and
instruments contemplated hereby which are executed and delivered by the
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement and all documents and
instruments contemplated hereby which are executed and delivered by the
Servicer, assuming due authorization, execution and delivery by the other
parties hereto, 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 and all documents and
instruments contemplated hereby which are executed and delivered by the
Servicer valid and binding upon the Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the charter or
by-laws 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 execution and delivery of this Agreement by the Servicer
and the performance and compliance with its obligations and covenants
hereunder do not require the consent or approval of any governmental
authority or, if such consent or approval is required, it has been
obtained;
(iv) [Reserved];
60
(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, (A) may result in any change in the
business, operations, financial condition, properties or assets of the
Servicer that might prohibit or materially and adversely affect the
performance by such Servicer of its obligations under, or validity or
enforceability of, this Agreement, or (B) may result in any material
impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted, or (C) 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 (D) would otherwise be likely to impair materially
the ability of the Servicer to perform under the terms of this Agreement;
(vii) 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 any untrue statement of a material fact;
(viii) The Servicer will not waive any Prepayment Charge unless it
is waived in accordance with the standard set forth in Section 3.01; and
(ix) The Servicer has accurately and fully reported, and will
continue to accurately and fully report on a monthly basis, its borrower
credit files to each of the credit repositories in a timely manner.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Servicer or the Trustee of a breach of any of the foregoing representations,
warranties and covenants which materially and adversely affects the value of any
Mortgage Loan, Prepayment Charge or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Servicer and the Trustee. Notwithstanding the foregoing, within 90 days
of the earlier of discovery by the Servicer or receipt of notice by the Servicer
of the breach of the representation or covenant of the Servicer set forth in
Section 2.05(viii) above which materially and adversely affects the interests of
the Holders of the Class P Certificates in any Prepayment Charge, the Servicer
must pay the amount of such waived Prepayment Charge, for the benefit of the
holders of the Class P Certificates, by depositing such amount into the
Collection Account. The foregoing shall not, however, limit any remedies
available to the Certificateholders, the Depositor or the Trustee on behalf of
the Certificateholders, pursuant to the Mortgage Loan Purchase Agreement
respecting a breach of the representations, warranties and covenants of the
Seller made in its capacity as a party to the Mortgage Loan Purchase Agreement.
SECTION 2.06. Representations and Warranties of the Depositor.
61
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor
had good and marketable title to each Mortgage Loan (insofar as such title
was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title and interest in the Mortgage Loans to the Trustee on behalf
of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, with full
corporate power and authority to own its assets and conduct its business
as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation or by-laws of
the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
62
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement,
as the case may be; or (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
SECTION 2.08. [Reserved].
SECTION 2.09. Conveyance of REMIC Regular Interests and Acceptance
of REMIC 2 and REMIC 3 by the Trustee; Issuance of
Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the assets described in the definition of REMIC 1 for the benefit of
the holders of the REMIC 1 Regular Interests (which are uncertificated) and the
Class R Certificates (in respect of the Class R-1 Interest). The Trustee
acknowledges receipt of the assets described in the definition of REMIC 1 and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of the holders of the REMIC 1 Regular Interests and the Class R
Certificates (in respect of the Class R-1 Interest). The interests evidenced by
the Class R-1 Interest, together with the REMIC 1 Regular Interests,
63
constitute the entire beneficial ownership interest in REMIC 1.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC 1 Regular Interests for the benefit of the holders of the
REMIC 2 Regular Interests (which are uncertificated) and the Class R
Certificates (in respect of the Class R-2 Interest). The Trustee acknowledges
receipt of the REMIC 1 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the holders of the
REMIC 2 Regular Interests and the Class R Certificates (in respect of the Class
R-2 Interest). The interests evidenced by the Class R-2 Interest, together with
the REMIC 2 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 2.
(c) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC 2 Regular Interests (which are uncertificated) for the
benefit of the Holders of the Regular Certificates and the Class R Certificates
(in respect of the Class R-3 Interest). The Trustee acknowledges receipt of the
REMIC 2 Regular Interests and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of the Regular
Certificates and the Class R Certificates (in respect of the Class R-3
Interest). The interests evidenced by the Class R-3 Interest, together with the
Regular Certificates (other than the Class C Certificates and the Class P
Certificates), the Class C Interest and the Class P Interest, constitute the
entire beneficial ownership interest in REMIC 3.
(d) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Class C Interest (which is uncertificated) for the benefit of the
Holders of the Class C Certificates and the Class R-X Certificates (in respect
of the Class R-4 Interest). The Trustee acknowledges receipt of the Class C
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class C Certificates and the
Class R-X Certificates (in respect of the Class R-4 Interest). The interests
evidenced by the Class R-4 Interest, together with the Class C Certificates,
constitute the entire beneficial ownership interest in REMIC 4.
(e) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse all the right, title and interest of the Depositor
in and to the Class P Interest (which is uncertificated) for the benefit of the
Holders of the Class P Certificates and the Class R-X Certificates (in respect
of the Class R-5 Interest). The Trustee acknowledges receipt of the Class P
Interest and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Class P Certificates and the
Class R-X Certificates (in respect of the Class R-5 Interest). The interests
evidenced by the Class R-5 Interest, together with the Class P Certificates,
constitute the entire beneficial ownership interest in REMIC 5.
(f) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and subsection
64
(a), (ii) the assignment and delivery to the Trustee of REMIC 2 (including the
Residual Interest therein represented by the Class R-2 Interest) and the
acceptance by the Trustee thereof, pursuant to subsection (b), (iii) the
assignment and delivery to the Trustee of REMIC 3 (including the Residual
Interest therein represented by the Class R-3 Interest), (iv) the assignment and
delivery to the Trustee of REMIC 4 (including the Residual Interest therein
represented by the Class R-4 Interest) and (v) the assignment and delivery to
the Trustee of REMIC 5 (including the Residual Interest therein represented by
the Class R-5 Interest) and the acceptance by the Trustee thereof, pursuant to
subsection (c), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, (A) the Class R Certificates in
authorized denominations evidencing the Class R-1 Interest, the Class R-2
Interest and the Class R-3 Interest and (B) the Class R-X Certificates in
authorized denominations evidencing the Class R-4 Interest and the Class R-5
Interest.
65
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer.
The Servicer shall service and administer the Mortgage Loans on
behalf of the Trust and in the best interests of and for the benefit of the
Certificateholders (as determined by the Servicer in its reasonable judgment) in
accordance with the terms of this Agreement and the Mortgage Loans and, to the
extent consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Sub-Servicer or any
Affiliate of the Servicer or any Sub-Servicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make Advances or Servicing
Advances; or
(iv) the Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer (a) shall
seek the timely and complete recovery of principal and interest on the Mortgage
Notes and (b) shall waive (or permit a Sub-Servicer to waive) a Prepayment
Charge only under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of the Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan or
(ii) the collection of such Prepayment Charge would be in violation of
applicable laws. Subject only to the above-described servicing standards and the
terms of this Agreement and of the Mortgage Loans, the Servicer shall have full
power and authority, acting alone or through Sub-Servicers as provided in
Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer, in the name of
the Trust Fund, is hereby authorized and empowered by the Trustee when the
Servicer believes it appropriate in its best judgment in accordance with the
Servicing Standard, to execute and deliver, on behalf of the Certificateholders
and the Trustee, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Mortgage Loans and the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert
the ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Servicer shall
service and administer the Mortgage Loans in accordance with applicable state
and federal law and
66
shall provide to the Mortgagors any reports required to be provided to them
thereby. The Servicer shall also comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any standard
hazard insurance policy. Subject to Section 3.17, on the Closing Date, the
Trustee shall execute and furnish to the Servicer and any Sub-Servicer any
special or limited powers of attorney and other documents necessary or
appropriate to enable the Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder; provided, such limited powers of
attorney or other documents shall be prepared by the Servicer and submitted to
the Trustee for execution. The Trustee shall not be liable for the actions by
the Servicer or any Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of
the preceding paragraph, the Servicer, on escrowed accounts, shall advance or
cause to be advanced funds as necessary for the purpose of effecting the payment
of taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in Section
3.11. Any cost incurred by the Servicer or by Sub-Servicers in effecting the
payment of taxes and assessments on a Mortgaged Property shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.04) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the Principal Balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (unless, in any such case, as provided in Section 3.07, the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause
any REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup date" under the REMIC Provisions.
The Servicer shall also undertake to defend, at the request of the
Trustee with respect to a claim against the Trustee or the Trust, any claims
against the Trust, the Trustee or itself by a Mortgagor which relate to the
servicing of any Mortgage Loan. This shall not be construed as an assumption of
liability in such matters. The Trustee shall notify the Servicer of any such
claim within fifteen (15) days of receiving notice of such claim. The Servicer
shall not be liable for any delay in responding to any claim of which it has not
received timely notice. The Trustee shall cooperate with the Servicer to effect
the smooth transition of any such undertaking, including the timely delivery of
all relevant litigation files and other related information. In the event the
Servicer acts on behalf of the Trustee, the Trust or itself in any such
litigation, the Trust shall pay all costs and expenses (including attorneys'
fees, court costs, settlements and judgments) associated with the defense and
management of such claim; provided, however, that the Servicer shall not be
indemnified for any such cost or expense relating to claims against the Servicer
and incurred by reason of its willful misfeasance, bad faith or negligence in
the performance of its duties hereunder.
67
SECTION 3.02. Sub-Servicing Agreements Between Servicer and
Sub-Servicers.
(a) The Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers, which may be Affiliates of the Servicer, for the servicing and
administration of the Mortgage Loans; provided, however, such sub-servicing
arrangement and the terms of the related Sub-Servicing Agreement must provide
for the servicing of the Mortgage Loans in a manner consistent with the
servicing arrangement contemplated hereunder. The Trustee is hereby authorized
to acknowledge, at the request of the Servicer, any Sub-Servicing Agreement that
meets the requirements applicable to Sub-Servicing Agreements set forth in this
Agreement and that is otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in
the state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer will
examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. Any variation in any Sub-Servicing
Agreements from the provisions set forth in Section 3.08 relating to insurance
or priority requirements of Sub-Servicing Accounts, or credits and charges to
the Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Servicer's execution and delivery of
such instruments.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement,
including, without limitation, any obligation to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement, to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loans,
or (ii) from a specific recovery of costs, expenses or attorneys' fees against
the party against whom such enforcement is directed.
SECTION 3.03. Successor Sub-Servicers.
The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any
68
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Servicer without any act or deed on the part of such
Sub-Servicer or the Servicer, and the Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub- Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Servicer or the Trustee (if the
Trustee is acting as Servicer) without fee, in accordance with the terms of this
Agreement, in the event that the Servicer (or the Trustee, if such party is then
acting as Servicer) shall, for any reason, no longer be the Servicer (including
termination due to a Servicer Event of Termination).
SECTION 3.04. Liability of the Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with a Sub-Servicer for indemnification of
the Servicer by such Sub-Servicer and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification.
SECTION 3.05. No Contractual Relationship Between Sub-Servicers and
the Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Trustee or Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
SECTION 3.06. Assumption or Termination of Sub-Servicing Agreements
by Trustee.
In the event the Servicer shall for any reason no longer be the
servicer (including by reason of the occurrence of a Servicer Event of
Termination), the Trustee, in addition to its duties under Section 7.02, shall
thereupon assume all of the rights and obligations of the Servicer under each
Sub-Servicing Agreement that the Servicer may have entered into, unless the
Trustee elects to terminate any Sub-Servicing Agreement in accordance with its
terms as provided in Section 3.03. Upon such assumption, the Trustee (or the
successor servicer appointed pursuant to Section 7.02) shall be deemed, subject
to Section 3.03, to have assumed all of the departing Servicer's interest
69
therein and to have replaced the departing Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the departing Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Servicer and (ii)
neither the Trustee nor any successor Servicer shall be deemed to have assumed
any liability or obligation of the Servicer that arose before it ceased to be
the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party. All Servicing Transfer Costs
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).
SECTION 3.07. Collection of Certain Mortgage Loan Payments.
The Servicer shall make reasonable efforts, in accordance with the
Servicing Standard, to collect all payments called for under the terms and
provisions of the Mortgage Loans and the provisions of any applicable insurance
policies provided to the Servicer. Consistent with the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or, if applicable, any
penalty interest only upon determining that the coverage of such Mortgage Loan
by the Mortgage Pool Insurance Policy will not be affected, or (ii) extend the
due dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event of
any such arrangement pursuant to clause (ii) above, the Servicer shall make
timely Advances on such Mortgage Loan during such extension pursuant to Section
4.04 and in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan), accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan, or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor
(any and all such waivers, modifications, variances, forgiveness of principal or
interest, postponements, or indulgences collectively referred to herein as
"forbearance"), provided, however, that (a) in no event shall the Servicer grant
any such forbearance (other than as permitted by the second sentence of this
Section) with respect to any one Mortgage Loan more than once in any 12 month
period or more than three times over the life of such Mortgage Loan and (b) no
such forbearance will be granted without the prior written consent of the
Mortgage Pool Insurer. The Servicer's analysis supporting any forbearance and
the conclusion that any forbearance meets the standards of Section 3.01 shall be
reflected in writing in the Mortgage File.
70
SECTION 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
SECTION 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
To the extent required by the related Mortgage Note, the Servicer
shall establish and maintain, or cause to be established and maintained, one or
more accounts (the "Escrow Accounts"), into which all Escrow Payments shall be
deposited and retained. Escrow Accounts shall be Eligible Accounts. The Servicer
shall deposit in the clearing account in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities, all Escrow Payments collected on account of the Mortgage Loans and
shall deposit such Escrow Payments in the Escrow Accounts, in no event more than
two Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from an Escrow Account may be made only to (i) effect
payment of taxes, assessments, hazard insurance premiums, and comparable items
in a manner and at a time that assures that the lien priority of the Mortgage is
not jeopardized (or, with respect to the payment of taxes, in a manner and at a
time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien); (ii) reimburse the Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any Servicing Advances made pursuant to Section 3.01
(with respect to taxes and assessments) and Section 3.14 (with respect to hazard
insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors
on balances in the Escrow Account; or (v) clear and terminate the Escrow Account
at the termination of the Servicer's obligations and responsibilities in respect
of the Mortgage Loans under this Agreement in accordance with Article X. In the
event the Servicer shall deposit in a Escrow Account any amount not required to
be deposited therein, it may at any time withdraw such amount from such Escrow
Account, any provision herein to the contrary notwithstanding. The Servicer will
be responsible for the administration of the Escrow Accounts and will be
obligated to make Servicing Advances to such accounts when and as necessary to
avoid the lapse of insurance coverage on the Mortgaged Property,
71
or which the Servicer knows, or in the exercise of the required standard of care
of the Servicer hereunder should know, is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Servicer receives notice of
a tax lien with respect to the Mortgage being imposed, the Servicer will, within
10 Business Days of receipt of such notice, advance or cause to be advanced
funds necessary to discharge such lien on the Mortgaged Property. As part of its
servicing duties, the Servicer or Sub-Servicers shall pay to the Mortgagors
interest on funds in the Escrow Accounts, to the extent required by law and, to
the extent that interest earned on funds in the Escrow Accounts is insufficient,
to pay such interest from its or their own funds, without any reimbursement
therefor. The Servicer may pay to itself any excess interest on funds in the
Escrow Accounts, to the extent such action is in conformity with the Servicing
Standard, is permitted by law and such amounts are not required to be paid to
Mortgagors or used for any of the other purposes set forth above.
SECTION 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the
Servicer shall deposit or cause to be deposited in the Collection Account, in no
event more than two Business Days after the Servicer's receipt thereof, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the Mortgage Loans due on or before the
Cut-off Date) or payments (other than Principal Prepayments) received by it on
or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments (but not Prepayment Charges), on the Mortgage Loans;
(ii) all payments on account of interest (net of the Servicing Fee)
on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds and
condemnation proceeds (other than proceeds collected in respect of any
particular REO Property and amounts paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03, Section 3.16(c) or Section 10.01;
72
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03;
(viii) all Prepayment Charges collected by the Servicer and any
Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans; and
(ix) without duplication, all payments of claims under the Mortgage
Pool Insurance Policy.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of Servicing Fees, late
payment charges, assumption fees, insufficient funds charges and ancillary
income (other than Prepayment Charges) need not be deposited by the Servicer in
the Collection Account and may be retained by the Servicer as additional
compensation. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account on or before 1:00 p.m. 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 withdrawn from the Distribution
Account) for the related Distribution Date then on deposit in the Collection
Account, the amount of all Prepayment Charges collected during the applicable
Prepayment Period by the Servicer and Servicer Prepayment Charge Payment Amounts
in connection with the Principal Prepayment of any of the Mortgage Loans then on
deposit in the Collection Account and the amount of any funds reimbursable to an
Advancing Person pursuant to Section 3.29 (unless such amounts are to be
remitted in another manner as specified in the documentation establishing the
related Advance Facility).
If, by 1:00 New York time, on the Servicer Remittance Date, the
Servicer fails to remit to the Trustee for deposit into the Distribution Account
any amounts required to be so remitted by the Servicer pursuant to this
Agreement, the Servicer shall pay to the Trustee, for its own account, interest
on such amounts at the prime rate for such date (as set forth in the Wall Street
Journal) until such failure is remedied.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Permitted Investments in accordance with the provisions set forth
in Section 3.12. The Servicer shall give 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.
73
(d) Funds held in the Collection Account at any time may be
delivered by the Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Servicer shall deliver to
the Trustee for deposit in the Distribution Account any amount not required to
be deposited therein, it may at any time request that the Trustee withdraw such
amount from the Distribution Account and remit to it any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer,
with respect to items (i) through (iv) below, shall deliver to the Trustee from
time to time for deposit, and the Trustee, with respect to items (i) through
(iv) below, shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Servicer in connection with a
purchase of Mortgage Loans and REO Properties pursuant to Section 10.01;
(iv) any Compensating Interest to be deposited pursuant to Section
3.24 in connection with any Prepayment Interest Shortfall; and
(v) any amounts required to be paid to the Trustee pursuant to the
Agreement, including, but not limited to Section 3.06 and Section 7.02.
SECTION 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.04:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.10(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Servicer for (a)
any unreimbursed Advances to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees),
Liquidation Proceeds and Insurance Proceeds on Mortgage Loans or REO
Properties with respect to which such Advances were made in accordance
with the provisions of Section 4.04; or (b) without limiting any right of
withdrawal set forth in clause (vi) below, any unreimbursed Advances that,
upon a Final Recovery Determination with respect to such Mortgage Loan,
are Nonrecoverable Advances, but only to the extent that Late Collections
(net of the related Servicing Fees), Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient to
reimburse the Servicer for such unreimbursed Advances;
74
(iii) subject to Section 3.16(d), to pay the Servicer or any
Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed Servicing
Advances with respect to each Mortgage Loan, but only to the extent of any
Late Collections, Liquidation Proceeds and Insurance Proceeds received
with respect to such Mortgage Loan or REO Property, and (c) without
limiting any right of withdrawal set forth in clause (vi) below, any
Servicing Advances made with respect to a Mortgage Loan that, upon a Final
Recovery Determination with respect to such Mortgage Loan are
Nonrecoverable Advances, but only to the extent that Late Collections,
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan are insufficient to reimburse the Servicer or any
Sub-Servicer for Servicing Advances;
(iv) to pay to the Servicer as additional servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any
interest or investment income earned on funds deposited in the Collection
Account;
(v) to pay itself or the Seller with respect to each Mortgage Loan
that has previously been purchased or replaced pursuant to Section 2.03 or
Section 3.16(c) all amounts received thereon subsequent to the date of
purchase or substitution, as the case may be;
(vi) to reimburse the Servicer for any Advance or Servicing Advance
previously made which the Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 4.04;
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.16(b);
(viii) to reimburse the Servicer for expenses incurred by or
reimbursable to the Servicer pursuant to Section 6.03;
(ix) to pay itself any Prepayment Interest Excess;
(x) to reimburse itself for expenses incurred pursuant to Section
9.01(c)(i); and
(xi) to clear and terminate the Collection Account pursuant to
Section 10.01.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii) above. The
Servicer shall provide written notification to the Trustee, on or prior to the
next succeeding Servicer Remittance Date, upon making any withdrawals from the
Collection Account pursuant to
75
subclause (vi) above; provided that an Officers' Certificate in the form
described under Section 4.04(d) shall suffice for such written notification to
the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions in accordance with Section 4.01;
(ii) to pay itself the Trustee Fee pursuant to Section 8.05 and to
pay the Mortgage Pool Insurer the Mortgage Pool Insurer Fee;
(iii) to pay any amounts in respect of taxes pursuant to Section
9.01(g);
(iv) to clear and terminate the Distribution Account pursuant to
Section 10.01;
(v) to pay any amounts required to be paid to the Trustee pursuant
to this Agreement, including but not limited to funds required to be paid
pursuant to Section 3.06, Section 7.02 and Section 8.05;
(vi) to pay to the Trustee, any interest or investment income earned
on funds deposited in the Distribution Account; and
(vii) to pay to an Advancing Person reimbursements for Advances
and/or Servicing Advances pursuant to Section 3.29.
SECTION 3.12. Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account and any REO Account to invest the funds on deposit in
such accounts, and the Trustee may invest the funds on deposit in the
Distribution Account (each such account, for the purposes of this Section 3.12,
an "Investment Account"). All investments pursuant to this Section 3.12 shall be
in one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon or if such investment is managed or advised by a Person
other than the Trustee or an Affiliate of the Trustee, and (ii) no later than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon or if such
investment is managed or advised by the Trustee or any Affiliate. All such
Permitted Investments shall be held to maturity, unless payable on demand. Any
investment of funds in an Investment Account shall be made in the name of the
Trustee (in its capacity as such), or in the name of a nominee of the Trustee.
The Trustee shall be entitled to sole possession (except with respect to
investment direction of funds held in the Collection Account and any REO Account
and any income and gain realized thereon) over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee
76
or its agent, together with any document of transfer necessary to transfer title
to such investment to the Trustee or its nominee. In the event amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder and (2) the amount required to
be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such Permitted
Investment would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on behalf of
the Servicer shall be for the benefit of the Servicer and shall be subject to
its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable.
The Servicer shall deposit in the Collection Account or any REO Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such Account immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account shall be for the benefit of the Trustee.
The Trustee shall deposit in the Distribution Account the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such Account immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
SECTION 3.13. Maintenance of the Mortgage Pool Insurance Policy;
Collections Thereunder.
The Servicer covenants and agrees to exercise its best reasonable
efforts to maintain and keep the Mortgage Pool Insurance Policy in full force
and effect throughout the term of this Agreement. The Servicer shall take
whatever action is appropriate to maximize the amounts payable under the
Mortgage Pool Insurance Policy and to service the Mortgage Loans in the manner
required by the Mortgage Pool Insurance Policy. In the event that in connection
with the Mortgage Pool Insurance Policy (i) the Mortgage Pool Insurer shall not
be qualified to transact a mortgage guaranty insurance business under the laws
of the state of its principal place of business or any other state which has
jurisdiction over the Mortgage Pool Insurer in connection with the Mortgage Pool
Insurance Policy, or (ii) the claims-paying ability of the Mortgage Pool Insurer
shall be reduced below investment grade by each Rating Agency, or (iii) the
Mortgage Pool Insurance Policy is canceled or terminated by the Mortgage Pool
Insurer for non-payment of the Mortgage Pool Insurer
77
Fee, the Servicer shall, upon notice to it of the existence of any of (i), (ii)
or (iii) above, exercise its best reasonable efforts to obtain from another
Qualified Pool Insurer a replacement policy comparable to the Mortgage Pool
Insurance Policy with a total coverage which is equal to the then existing
coverage of such Mortgage Pool Insurance Policy; provided that if the cost of
such replacement policy shall be greater than the cost of the Mortgage Pool
Insurance Policy, the amount of coverage of such replacement policy shall be
reduced to a level such that the cost of such replacement policy shall not
exceed the cost of the Mortgage Pool Insurance Policy.
The Trustee shall pay the Mortgage Pool Insurer Fee from amounts on
deposit in the Distribution Account on a monthly basis in accordance with the
terms of the Mortgage Pool Insurance Policy and this Agreement. In furtherance
of the foregoing, the Trustee shall withdraw from the Distribution Account and
forward to the Mortgage Pool Insurer (prior to making distributions on the
Certificates) in immediately available funds (i) on or before 12:00 noon
(Philadelphia time) on each Distribution Date the Mortgage Pool Insurer Fee due
on such Distribution Date and (ii) promptly when due, any other amount owed to
the Mortgage Pool Insurer under the Mortgage Pool Insurance Policy and this
Agreement.
The Servicer shall not take, or permit any Sub-Servicer to take, any
action which would result in non-coverage under the Mortgage Pool Insurance
Policy or of any loss which, but for the actions of the Servicer or
Sub-Servicer, would have been covered thereunder. The Servicer will comply in
the performance of this Agreement with all reasonable rules and requirements of
the Mortgage Pool Insurer and the terms of the Mortgage Pool Insurance Policy.
In connection with any assumption and modification agreement or substitution of
liability agreement entered into or to be entered into pursuant to Section 3.15,
the Servicer shall promptly notify the Mortgage Pool Insurer of such assumption
in accordance with the terms of such policies and shall take all actions which
may be required by the Mortgage Pool Insurer as a condition to the continuation
of coverage under the Mortgage Pool Insurance Policy.
In connection with its activities as servicer of the Mortgage Loans,
the Servicer agrees to prepare and present, on behalf of itself, the Trustee and
the Certificateholders, claims to the Mortgage Pool Insurer under the Mortgage
Pool Insurance Policy in a timely fashion in accordance with the terms of the
Mortgage Pool Insurance Policy and, in this regard, to take such action as shall
be necessary to permit recovery under the Mortgage Pool Insurance Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Servicer
under the Mortgage Pool Insurance Policy shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11; and any amounts
collected by the Servicer under the Mortgage Pool Insurance Policy in respect of
any REO Property shall be deposited in the related REO Account, subject to
withdrawal pursuant to Section 3.23.
SECTION 3.14. Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance with extended coverage on the Mortgaged Property in an amount
which is at least equal to the lesser of (i) the current Principal Balance of
such Mortgage Loan and (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on
78
a replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Servicer shall also cause to be maintained
hazard insurance with extended coverage on each REO Property in an amount which
is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding
Principal Balance of the related Mortgage Loan at the time it became an REO
Property. The Servicer will comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Servicer under any such policies
(other than amounts to be applied to the restoration or repair of the property
subject to the related Mortgage or amounts to be released to the Mortgagor in
accordance with the procedures that the Servicer would follow in servicing loans
held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11, if received in respect of a
Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section
3.23, if received in respect of an REO Property. Any cost incurred by the
Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
Principal Balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. Such costs shall be recoverable by the Servicer
out of late payments by the related mortgagor or out of Liquidation Proceeds,
but only to the extent that all amounts owed to the Holders, the Trustee and the
Trust Fund have been remitted by the Servicer to the Trustee. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Mortgaged Property or REO Property is at any time in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards and flood insurance has been made available, the Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
Principal Balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by competent servicers, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with the
first two sentences of this Section 3.14, and there shall have been one or more
losses which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of itself, the Depositor, the Trustee and Certificateholders, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's
79
obligations under this Agreement, which policy or policies shall be in such form
and amount that would meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it
were the purchaser of the Mortgage Loans, unless the Servicer has obtained a
waiver of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall
also maintain a fidelity bond in the form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac, unless the Servicer has obtained a
waiver of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall
be deemed to have complied with this provision if an Affiliate of the Servicer
has such errors and omissions and fidelity bond coverage and, by the terms of
such insurance policy or fidelity bond, the coverage afforded thereunder extends
to the Servicer. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Sub-Servicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if in its sole business
judgment the Servicer believes it is not in the best interests of the Trust Fund
and shall not exercise any such rights if prohibited by law from doing so or if
the exercise of such rights would impair or threaten to impair any recovery
under the Mortgage Pool Insurance Policy. If the Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale" clause, or if any
of the other conditions set forth in the proviso to the preceding sentence
apply, the Servicer will, with the prior written consent of the Mortgage Pool
Insurer, enter into enter into an assumption and modification agreement from or
with the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Servicer is also authorized, to the extent permitted under
the related Mortgage Note, to enter into a substitution of liability agreement
with such person, pursuant to which the original Mortgagor is released from
liability and such person is substituted as the Mortgagor and becomes liable
under the Mortgage Note, provided that no such substitution shall be effective
unless such person satisfies the then current underwriting criteria of the
Servicer for a mortgage loan similar to the related Mortgage Loan. In connection
with any assumption, modification or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of the Mortgage Pool Insurance Policy
and any applicable hazard insurance policy. Any fee collected by the Servicer in
respect of an assumption, modification or substitution of liability agreement
shall be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as
80
otherwise required pursuant to the terms thereof. The Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered a
part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.15, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
SECTION 3.16. Realization Upon Defaulted Mortgage Loans.
(a)(i) The Servicer shall use its reasonable efforts, consistent
with the Servicing Standard and the Mortgage Pool Insurance Policy, to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. Title to any such property shall be taken in the name
of the Trustee or its nominee, on behalf of the Certificateholders, subject to
applicable law. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings; provided, however, that such costs and
expenses will be recoverable as Servicing Advances by the Servicer as
contemplated in Section 3.11(a) and Section 3.23. The foregoing is subject to
the provision that, in any case in which a Mortgaged Property shall have
suffered damage from an Uninsured Cause, the Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion that such restoration will increase the proceeds of
liquidation of the related Mortgage Loan after reimbursement to itself for such
expenses.
(ii) With respect to any Mortgage Loan for which coverage under the
Mortgage Pool Insurance Policy is not available, if the Servicer determines that
no significant recovery is possible through foreclosure proceedings or other
liquidation of the related Mortgaged Property, it will be obligated to charge
off the related Mortgage Loan no later than the time such Mortgage Loan becomes
180 days Delinquent. Once a Mortgage Loan has been charged off, the Servicer
will discontinue making Advances, the Servicer will not be entitled to any
additional servicing compensation, the Charged Off Loan will give rise to a
Realized Loss, and the Servicer will follow the procedures described in
paragraph (a)(iii) below.
(iii) Any Charged Off Loan will continue to be serviced by Servicer
for the Holders of the Class X Certificates using non-foreclosure collection
procedures. The Servicer will not be entitled to any Servicing Fees or
reimbursement of expenses in connection with such Charged Off Loans except to
the extent of funds available from the aggregate amount of recoveries on such
Charged Off Loan which shall be paid to the Servicer as any accrued and unpaid
Servicing Fees. The Servicer will only be entitled to previously accrued
Servicing Fees on any such Charged Off Loans and will not be entitled to receive
any future unaccrued Servicing Fees or expenses from collections
81
on such Charged Off Loans. Any Charged Off Loan serviced by the Servicer using
non-foreclosure collection procedures shall be so serviced until the Release
Date described below. Any recoveries on such Charged Off Loans (net of accrued
and unpaid Servicing Fees) received prior to the Release Date will be treated as
Liquidation Proceeds distributable to the Holders of the Class X Certificates.
On the date (the "Release Date") which is six months after the date
on which the Servicer begins servicing any Charged Off Loans using the
non-foreclosure procedures, unless specific recoveries are anticipated by the
Servicer on a particular Charged Off Loan (in which case the Release Date will
be delayed until all such specific anticipated recoveries are received, subject
to the consent of the Holders of the Class X Certificates), such Charged Off
Loan will be transferred to the Holders of the Class X Certificates, without
recourse, and thereafter (i) those Holders will be entitled to any amounts
subsequently received in respect of any such Released Loans, (ii) the Holders of
the Class X Certificates may designate any servicer to service any such Released
Loan and (iii) the Holders of the Class X Certificates may sell any such
Released Loan to a third party. Notwithstanding the previous sentence, if at any
time after a Mortgage Loan has been charged off, the Servicer determines that
there will not be any recoveries on such Charged Off Loan under any
circumstances, the Servicer may release such Charged Off Loan to the Holders of
the Class X Certificates in accordance with the provisions set forth in the
previous sentence. Promptly following each Release Date with respect to any
Charged Off Loan, the Trustee, upon receipt of a Request for Release from the
Servicer, shall release to the Holders of the Class X Certificates the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Servicer shall furnish to it
and as shall be necessary to vest in the Holders of the Class X Certificates any
Released Loan and the Trustee shall have no further responsibility with regard
to such Mortgage File (it being understood that the Trustee shall have no
responsibility for determining the sufficiency of such assignment for its
intended purpose).
Notwithstanding the foregoing, the procedures described above in
this subsection 3.11(a)(iii) relating to the treatment of Charged Off Loans may
be modified at any time at the discretion of the Holders of the Class X
Certificates, with the reasonable consent of the Servicer.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Servicer has received actual notice of, or has actual knowledge of,
the presence of any toxic or hazardous substance on the related Mortgaged
Property, the Servicer shall not, on behalf of the Trustee, either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property, if, as a result of any such action,
the Trustee, the Trust Fund or the Certificateholders would be considered to
hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or
"operator" of such Mortgaged Property within the meaning of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any comparable law, unless the Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:
82
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic interest
of the Trust Fund to take such actions with respect to the affected
Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
If the Servicer determines, as described above, that it is in the
best economic interest of the Trust Fund to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Trust Fund; provided that any amounts disbursed by the Servicer
pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to
Section 4.04(d). The cost of any such compliance, containment, clean-up or
remediation shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.11(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Servicer may, at its option, purchase a Mortgage Loan which
has become 90 or more days delinquent or for which the Servicer has accepted a
deed in lieu of foreclosure. Prior to purchase pursuant to this Section 3.16(c),
the Servicer shall be required to continue to make Advances pursuant to Section
4.04. If the Servicer purchases any delinquent Mortgage Loans pursuant to this
Section 3.16(c), it must purchase Mortgage Loans that are delinquent the
greatest number of days before it may purchase any that are delinquent any fewer
number of days. The Servicer shall purchase such delinquent Mortgage Loan at a
price equal to the Purchase Price of such Mortgage Loan. Any such purchase of a
Mortgage Loan pursuant to this Section 3.16(c) shall be accomplished by deposit
in the Collection Account of the amount of the Purchase Price. Upon the
satisfaction of the requirements set forth in Section 3.17(a), the Trustee shall
immediately deliver the Mortgage File and any related documentation to the
Servicer and will execute such documents provided to it as are necessary to
convey the Mortgage Loan to the Servicer.
With respect to any Mortgage Loan for which coverage under the
Mortgage Pool Insurance Policy is available, within five (5) Business Days
following the date that such a Mortgage
83
Loan becomes 180 days delinquent, the Servicer will submit a claim for such
Mortgage Loan under the Mortgage Pool Insurance Policy.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Servicer or any Sub-Servicer for
any related unreimbursed Servicing Advances pursuant to Section 3.11(a)(iii) and
Advances pursuant to Section 3.11(a)(ii); third, to accrued and unpaid interest
on the Mortgage Loan, to the date of the Final Recovery Determination, or to the
Due Date prior to the Distribution Date on which such amounts are to be
distributed if not in connection with a Final Recovery Determination; and
fourth, as a recovery of principal of the Mortgage Loan. The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer shall immediately notify or
cause to be notified the Trustee by a certification and shall deliver to the
Trustee, in written or electronic format, two executed copies of a Request for
Release in the form of Exhibit E hereto (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer)
and shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Servicer or the
related Mortgagor, the related Mortgage File to the Servicer. The Trustee agrees
to indemnify the Servicer, out of its own funds, for any loss, liability or
expense (other than special, indirect, punitive or consequential damages which
will not be paid by the Trustee) incurred by the Servicer as a proximate result
of the Trustee's breach of its obligations pursuant to this Section 3.17. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
the Mortgage Pool Insurance Policy or any insurance policy relating to the
Mortgage Loans, the Trustee shall, upon any request made by or on behalf of the
Servicer and delivery to the Trustee, in written (with two executed copies) or
electronic format, of a Request for Release in the form of Exhibit E hereto
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File to the Servicer within three Business Days,
and the Trustee shall, at the direction of the Servicer, execute such documents
as shall be necessary to the prosecution of any such proceedings. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has
84
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has delivered, or caused to be
delivered, to the Trustee an additional Request for Release certifying as to
such liquidation or action or proceedings. Upon the request of the Trustee, the
Servicer shall provide notice to the Trustee of the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release, in
written (with two executed copies) or electronic format, from a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, such Mortgage Loan shall be released
by the Trustee to the Servicer or its designee within three Business Days.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer or the Sub-Servicer, as the case may
be, copies of, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
SECTION 3.18. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to the Servicing Fee with respect to each Mortgage Loan payable solely
from payments of interest in respect of such Mortgage Loan, subject to Section
3.24. In addition, the Servicer shall be entitled to recover unpaid Servicing
Fees out of Insurance Proceeds, Liquidation Proceeds or condemnation proceeds to
the extent permitted by Section 3.11(a)(iii) and out of amounts derived from the
operation and sale of an REO Property to the extent permitted by Section 3.23.
Except as provided in Section 3.29, the right to receive the Servicing Fee may
not be transferred in whole or in part except in connection with the transfer of
all of the Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Servicer may pay from the Servicing Fee any amounts
due to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under
Section 3.02.
Additional servicing compensation in the form of assumption fees,
late payment charges, insufficient funds charges, ancillary income or otherwise
(other than Prepayment Charges) shall be retained by the Servicer only to the
extent such fees or charges are received by the Servicer. The Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and
85
Section 3.24. The Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including premiums for
the insurance required by Section 3.14, to the extent such premiums are not paid
by the related Mortgagors or by a Sub-Servicer and servicing compensation of
each Sub-Servicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
The Servicer shall be entitled to any Prepayment Interest Excess,
which it may withdraw from the Collection Account pursuant to Section
3.11(a)(ix).
SECTION 3.19. Reports to the Trustee; Collection Account Statements.
Not later than twenty days after each Distribution Date, the
Servicer shall forward, upon request, to the Trustee and the Depositor the most
current available bank statement for the Collection Account. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon request at the expense of the requesting party, provided such statement is
delivered by the Servicer to the Trustee.
SECTION 3.20. Statement as to Compliance.
The Servicer will deliver to the Trustee and the Depositor not later
than March 1st of each calendar year, commencing in 2004, an Officers'
Certificate in the form attached hereto as Exhibit I stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding year and of performance under this Agreement has been made under
such officers' supervision and (ii) to the best of such officers' knowledge,
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Servicer to the Trustee. In addition to the foregoing, the Servicer will, to the
extent reasonable, give any other servicing information required by the
Securities and Exchange Commission pursuant to applicable law.
SECTION 3.21. Independent Public Accountants Servicing Report.
Not later than March 1st of each calendar year, commencing in 2004,
the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Servicer a report
stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed 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
86
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one year of such report)
with respect to those Sub-Servicers. Immediately upon receipt of such report,
the Servicer shall furnish a copy of such report to the Trustee and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.
SECTION 3.22. Access to Certain Documentation; Filing of Reports by
Trustee.
(a) The Servicer shall provide to the Office of Thrift Supervision,
the FDIC, and any other federal or state banking or insurance regulatory
authority that may exercise authority over any Certificateholder, access to the
documentation regarding the Mortgage Loans required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Servicer designated by it. In addition, access to the documentation regarding
the Mortgage Loans will be provided to any Certificateholder, the Trustee and to
any Person identified to the Servicer as a prospective transferee of a
Certificate, upon reasonable request during normal business hours at the offices
of the Servicer designated by it at the expense of the Person requesting such
access.
(b)(i) The Trustee and the Servicer shall reasonably cooperate with
the Depositor in connection with the Trust's satisfying the reporting
requirements under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Trustee shall prepare on behalf of the Trust any Forms 8-K
and 10-K customary for similar securities as required by the Exchange Act and
the Rules and Regulations of the Securities and Exchange Commission thereunder,
and the Depositor shall sign (or shall cause another entity acceptable to the
Securities and Exchange Commission to sign) and the Trustee shall file (via the
Securities and Exchange Commission's Electronic Data Gathering and Retrieval
System) such forms on behalf of the Depositor (or such other entity). The
Depositor hereby grants to the Trustee a limited power of attorney to execute
any Form 8-K and file each such document on behalf of the Depositor. Such power
of attorney shall continue until the earlier of (i) receipt by the Trustee from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding anything herein to the contrary, the
Depositor, and not the Trustee, shall be responsible for executing each Form
10-K filed on behalf of the Trust.
(ii) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Subject to
Section 3.22(b)(v), prior to March 30th of each year (or such earlier date as
may be required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission), the Trustee shall file a Form 10-K, in
substance as required by applicable law or applicable Security and Exchange
Commission staff's interpretations. The Trustee shall prepare such Form 10-K and
provide the Depositor with such Form 10-K not later than March 20th of each
year, subject to Section 3.22(b)(v). Following its receipt thereof, the
Depositor shall execute such Form 10-K and provide the original of such Form
10-K to the Trustee not later than March 25th (or, if the applicable March 25th
is not a Business Day, the next succeeding Business Day) of each
87
year; provided, however, that if the filing of such Form 10-K shall be required
to occur on a date earlier than March 30th of each year as may be required by
the Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission, then the time periods for preparation and execution of such Form
10-K set forth in this sentence shall be adjusted accordingly). Such Form 10-K
when filed shall include as exhibits the Servicer's annual statement of
compliance described under Section 3.20 and the accountant's report described
under Section 3.21, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence or willful misconduct. The
Form 10-K shall also include a certification in the form attached hereto as
Exhibit N-1 (the "Certification"), which shall be signed by the senior officer
of the Depositor in charge of securitization.
(iii) In addition, (x) the Trustee shall sign a certification (in
the form attached hereto as Exhibit N-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of the
Certification (the "Trustee Certification"); provided, however, that the Trustee
shall not undertake an analysis of the accountant's report attached as an
exhibit to the Form 10-K, and (y) the Servicer shall sign a certification (in
the form attached hereto as Exhibit N-3) for the benefit of the Depositor, the
Trustee and their officers, directors and Affiliates regarding certain aspects
of the Certification (the "Servicer Certification"). The Servicer Certification
shall be delivered to the Depositor and the Trustee no later than March 10th or
if such day is not a Business Day, the preceding Business Day, each year
(subject to Section 3.22(b)(v) hereof).
In addition, (A) the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any actual
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of
third party claims based upon a breach of the Trustee's obligations under this
Section 3.22(b) or any material misstatement or omission contained in the
Trustee Certification, and (B) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any actual losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses that such Person may sustain arising out of third
party claims based upon a breach of the Servicer's obligations under this
Section 3.22(b)(iii), any material misstatement or omission contained in the
Servicer's Certification or any information correctly derived by the Trustee and
included in a Form 8-K or Form 10-K from information provided to the Trustee by
the Servicer under this Agreement. If the indemnification provided for herein is
unavailable or insufficient to hold harmless the Depositor, then (i) the Trustee
agrees that it shall contribute to the amount paid or payable by the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other and (ii) the Servicer agrees that
it shall contribute to the amount paid or payable by the Depositor as a result
of the losses, claims, damages or liabilities of the Depositor in such
proportion as is appropriate to reflect the relative fault of the Depositor on
the one hand and the Servicer on the other.
88
(iv) Upon any filing with the Securities and Exchange Commission,
the Trustee shall promptly deliver to the Depositor a copy of any executed
report, statement or information.
(v) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
(vi) To the extent that, following the Closing Date, the Depositor
certifies that reports and certifications differing from those required under
this Section 3.22(b) comply with the reporting requirements under the Exchange
Act, the Trustee and the Servicer hereby agree that they will reasonably
cooperate to amend the provisions of this Section 3.22(b) in order to comply
with such amended reporting requirements and such amendment of this Section
3.22(b); provided, however, that the Trustee shall not be responsible for
executing any Form 10-K or the Certification. Any such amendment may result in
the reduction of the reports filed by the Depositor under the Exchange Act.
SECTION 3.23. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall,
subject to applicable laws, be taken in the name of the Trustee, or its nominee,
in trust for the benefit of the Certificateholders. The Servicer, on behalf of
REMIC 1, shall sell any REO Property as soon as practicable and in any event no
later than the end of the third full taxable year after the taxable year in
which such REMIC acquires ownership of such REO Property for purposes of Section
860G(a)(8) of the Code or request from the Internal Revenue Service, no later
than 60 days before the day on which the three-year grace period would otherwise
expire, an extension of such three-year period, unless the Servicer shall have
delivered to the Trustee an Opinion of Counsel, addressed to the Trustee and the
Depositor, to the effect that the holding by the REMIC of such REO Property
subsequent to three years after its acquisition will not result in the
imposition on the REMIC of taxes on "prohibited transactions" thereof, as
defined in Section 860F of the Code, or cause any of the REMICs created
hereunder to fail to qualify as a REMIC under Federal law at any time that any
Certificates are outstanding. The Servicer shall manage, conserve, protect and
operate each REO Property for the Certificateholders solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by any of the REMICs
created hereunder of any "income from non-permitted assets" within the meaning
of Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions.
(b) The Servicer shall separately account for all funds collected
and received in connection with the operation of any REO Property and shall
establish and maintain, or cause to be established and maintained, with respect
to REO Properties an account held in trust for the Trustee for the benefit of
the Certificateholders (the "REO Account"), which shall be an Eligible Account.
The Servicer shall be permitted to allow the Collection Account to serve as the
REO Account, subject to separate ledgers for each REO Property. The Servicer
shall be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.
89
(c) The Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Agreement, to do any and
all things in connection with any REO Property as are consistent with the manner
in which the Servicer manages and operates similar property owned by the
Servicer or any of its Affiliates, all on such terms and for such period
(subject to the requirement of prompt disposition set forth in Section
3.23(a))as the Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Servicer shall deposit, or cause to be deposited in
the REO Account, in no event more than two Business Days after the Servicer's
receipt thereof, all revenues received by it with respect to an REO Property and
shall withdraw therefrom funds necessary for the proper operation, management
and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain, operate and
dispose of such REO Property.
To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Servicer
shall advance from its own funds such amount as is necessary for such purposes
if, but only if, the Servicer would make such advances if the Servicer owned the
REO Property and if in the Servicer's judgment, the payment of such amounts will
be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Servicer nor the Trustee
shall:
(A) authorize the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real Property;
(B) authorize any amount to be received or accrued under any New
Lease other than amounts that will constitute Rents from Real Property;
(C) authorize any construction on any REO Property, other than the
completion of a building or other improvement thereon, and then only if
more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the
Code; or
(D) authorize any Person to Directly Operate any REO Property on any
date more than 90 days after its date of acquisition by the Trust Fund;
unless, in any such case, the Servicer has obtained an Opinion of Counsel,
provided to the Trustee, to the effect that such action will not cause such REO
Property to fail to qualify as "foreclosure
90
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by the REMIC, in which case the Servicer may take such actions as are
specified in such Opinion of Counsel.
The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(1) the terms and conditions of any such contract shall not be
inconsistent herewith;
(2) any such contract shall require, or shall be administered to
require, that the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Servicer as soon as practicable, but in
no event later than thirty days following the receipt thereof by such
Independent Contractor;
(3) none of the provisions of this Section 3.23(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Servicer of any of its duties and
obligations to the Trustee on behalf of the Certificateholders with
respect to the operation and management of any such REO Property; and
(4) the Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The fees of the Independent Contractor may be reimbursable
to the Servicer as a Servicing Advance if the Servicer takes possession of the
related REO Property and otherwise the Servicer shall be solely liable for all
fees owed by it to any such Independent Contractor, irrespective of whether the
Servicer's compensation pursuant to Section 3.18 is sufficient to pay such fees;
provided, however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c),
the Servicer may from time to time make withdrawals from the REO Account for any
REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of
such REO Property or the related Mortgage Loan. On the Servicer Remittance Date,
the Servicer shall withdraw from each REO Account maintained by it and deposit
into the Distribution Account in accordance with Section 3.10(d)(ii), for
distribution on the related Distribution Date in accordance with Section 4.01,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).
91
(e) Subject to the time constraints set forth in Section 3.23(a),
each REO Disposition shall be carried out by the Servicer in a manner, at such
price and upon such terms and conditions as shall be normal and usual in the
Servicing Standard.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Servicer Remittance Date in the month following
the receipt thereof for distribution on the related Distribution Date in
accordance with Section 4.01. Any REO Disposition shall be for cash only (unless
changes in the REMIC Provisions made subsequent to the Startup Day allow a sale
for other consideration).
(g) The Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by the
Code. Such reports shall be in form and substance sufficient to meet the
reporting requirements of the Code.
SECTION 3.24. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls.
Not later than 1:00 p.m. New York time on each Servicer Remittance
Date, the Servicer shall remit to the Distribution Account an amount
("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) its
aggregate Servicing Fee received in the related Due Period. The Servicer shall
not have the right to reimbursement for any amounts remitted to the Trustee in
respect of Compensating Interest. Such amounts so remitted shall be included in
the Available Funds and distributed therewith on the next Distribution Date. The
Servicer shall not be obligated to pay Compensating Interest with respect to
Relief Act Interest Shortfalls or shortfalls resulting from payments made under
the Mortgage Pool Insurance Policy.
SECTION 3.25. Reserved.
SECTION 3.26. Reserved.
SECTION 3.27. Reserved.
SECTION 3.28. Reserved.
SECTION 3.29. Advance Facility.
The Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility") under which (1) the
Servicer sells, assigns or pledges to another Person (together with such
Person's successors and assigns, an "Advancing Person") the Servicer's rights
under this Agreement to be reimbursed for any Advances or Servicing Advances
and/or (2) an Advancing Person agrees to fund some or all Advances and/or
Servicing Advances required to
92
be made by the Servicer pursuant to this Agreement. No consent of the Depositor,
the Trustee, the Certificateholders or any other party shall be required before
the Servicer may enter into an Advance Facility. The Servicer shall notify each
other party to this Agreement prior to or promptly after entering into or
terminating any Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund Advances and/or
Servicing Advances on the Servicer's behalf, the Servicer shall remain obligated
pursuant to this Agreement to make Advances and Servicing Advances pursuant to
and as required by this Agreement. If the Servicer enters into an Advance
Facility, and for so long as an Advancing Person remains entitled to receive
reimbursement for any Advances including Nonrecoverable Advances ("Advance
Reimbursement Amounts") and/or Servicing Advances including Nonrecoverable
Advances ("Servicing Advance Reimbursement Amounts" and together with Advance
Reimbursement Amounts, "Reimbursement Amounts") (in each case to the extent such
type of Reimbursement Amount is included in the Advance Facility), as
applicable, pursuant to this Agreement, then, the Servicer shall identify such
Reimbursement Amounts consistent with the reimbursement rights set forth in
Section 3.11(a)(ii), (iii), (vi) and (vii) and remit such Reimbursement Amounts
in accordance with Section 3.10(b) or otherwise in accordance with the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person. Notwithstanding anything to the contrary herein, in no event
shall Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts
be included in the Available Funds or distributed to Certificateholders.
Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming the Servicer or the Advancing Person had made the
related Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing,
except with respect to reimbursement of Nonrecoverable Advances as set forth in
this Agreement, no Person shall be entitled to reimbursement from funds held in
the Collection Account for future distribution to Certificateholders pursuant to
this Agreement. None of the Depositor or the Trustee shall have any duty or
liability with respect to the calculation or payment of any Reimbursement
Amount, nor shall the Depositor or the Trustee have any responsibility to track
or monitor the administration of the Advance Facility or to track, monitor or
verify the payment of Reimbursement Amounts to the related Advancing Person or
Advance Facility Trustee. 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, sold, pledged or assigned to, and
reimbursed to any Advancing 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.
An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding or purchase of Advances and/or
Servicing Advances shall not be required to meet the criteria for qualification
of a subservicer set forth in this Agreement.
Reimbursement Amounts distributed with respect to each Mortgage Loan
shall be allocated to outstanding unreimbursed Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first in,
first out" (FIFO) basis. Such documentation shall
93
also require the Servicer to provide to the related Advancing Person or Advance
Facility Trustee loan by loan information with respect to each Reimbursement
Amount distributed to such Advancing Person or Advance Facility Trustee, to
enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan. The
Servicer shall remain entitled to be reimbursed for all Advances and Servicing
Advances funded by the Servicer to the extent the related rights to be
reimbursed therefor have not been sold, assigned or pledged to an Advancing
Person.
The Servicer shall indemnify the Depositor, the Trustee, any
successor servicer and the Trust Fund resulting from any claim by the related
Advancing Person, except to the extent that such claim, loss, liability or
damage resulted from or arose out of negligence, recklessness or willful
misconduct or breach of its duties hereunder on the part of the Depositor, the
Trustee or any successor servicer.
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. Prior to
entering into an Advance Facility, the Servicer shall notify the Advancing
Person in writing that: (a) the Advances and/or Servicing Advances purchased,
financed by and/or pledged to the Advancing Person are obligations owed to the
Servicer on a non-recourse basis 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 otherwise obligated or liable to repay any Advances and/or Servicing
Advances financed by the Advancing Person; (b) the Servicer will be responsible
for remitting to the Advancing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advancing
Person, subject to the restrictions and priorities created in this Agreement;
and (c) the Trustee shall not have any responsibility to track or monitor the
administration of the Advance Facility between the Servicer and the Advancing
Person.
94
ARTICLE IV
FLOW OF FUNDS
SECTION 4.01. Distributions .
(a)(I) On each Distribution Date, the Trustee shall withdraw from
the Distribution Account that portion of Available Funds for such Distribution
Date consisting of the Group I Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group I Interest
Remittance Amount remaining for such Distribution Date:
(i) concurrently, to the Holders of the Class A-1 Certificates and
the Class S Certificates (in respect of the Class S-1 Component), the
Monthly Interest Distributable Amount and the Unpaid Interest Shortfall
Amount, if any, for such Certificates on a pro rata basis based on the
entitlement of each such Class; and
(ii) to the Holders of the Class A-2 Certificates and the Class S
Certificates (in respect of the Class S-2 Component), on a pro rata basis
based on the entitlement of each such Class, an amount equal to the
excess, if any, of (x) the amount required to be distributed pursuant to
Section 4.01(a)(II)(i) below for such Distribution Date over (y) the
amount actually distributed pursuant to such clause from the Group II
Interest Remittance Amount.
(II) On each Distribution Date the Trustee shall withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date.
(i) concurrently, to the Holders of the Class A-2 Certificates and
the Class S Certificates (in respect of the Class S-2 Component), the
Monthly Interest Distributable Amount and the Unpaid Interest Shortfall
Amount, if any, for such Certificates on a pro rata basis based on the
entitlement of each such Class; and
(ii) to the Holders of the Class A-1 Certificates and the Class S
Certificates (in respect of the Class S-1 Component), on a pro rata basis
based on the entitlement of each such Class, an amount equal to the
excess, if any, of (x) the amount required to be distributed pursuant to
Section 4.01(a)(I)(i) above for such Distribution Date over (y) the amount
actually distributed pursuant to such clause from the Group I Interest
Remittance Amount.
(III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall make the
following disbursements and transfers in the order of priority described below,
in each case to the extent of the sum of the Group I Interest Remittance Amount
and the Group II Interest Remittance Amount remaining undistributed for such
Distribution Date.
95
(i) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(ii) to the Holders of the Class M-2 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates;
(iii) to the Holders of the Class M-3 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates; and
(iv) to the Holders of the Class M-4 Certificates, the Monthly
Interest Distributable Amount allocable to such Certificates.
(b)(I) On each Distribution Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, distributions in respect of principal
to the extent of the Group I Principal Distribution Amount shall be made from
remaining Available Funds in the following amounts and order of priority:
(i) first, to the Holders of the Class A-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed to the
Holders of the Class A-2 Certificates pursuant to clause (b)(II)(i) below
on such Distribution Date, to the Holders of the Class A-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero.
(II) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal to
the extent of the Group II Principal Distribution Amount shall be made from
remaining Available Funds in the following amounts and order of priority:
(i) first, to the Holders of the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(ii) second, after taking into account the amount distributed to the
Holders of the Class A-1 Certificates pursuant to clause (b)(I)(i) above
on such Distribution Date, to the Holders of the Class A-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero.
(III) On each Distribution Date (a) prior to the Stepdown Date or
(b) on which a Trigger Event is in effect, distributions in respect of principal
to the extent of the sum of the Group I Principal Distribution Amount and the
Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made from remaining Available Funds in the following
amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
96
(ii) second, to the Holders of the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Holders of the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
(c)(I) On each Distribution Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made from remaining Available Funds in the following amounts and order of
priority:
(i) first, to the Holders of the Class A-1 Certificates, the Class
A-1 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) second, to the extent of the portion, if any, of the Class A-1
Principal Distribution Amount remaining undistributed pursuant to clause
(c)(I)(i) above on such Distribution Date, and after taking into account
the amount distributed to the Holders of the Class A-2 Certificates
pursuant to clause (c)(II)(i) below on such Distribution Date, to the
Holders of the Class A-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
(iii) third, to the holders of the Class A-2 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be distributed
pursuant to clause (c)(II)(i) below for such Distribution Date over (y)
the sum of (A) the amount actually distributed pursuant to clause
(c)(II)(i) below from the Group II Principal Distribution Amount on such
Distribution Date and (B) the amount, if any, distributed to the Holders
of the Class A-2 Certificates pursuant to clause (c)(I)(ii) above on such
Distribution Date.
(II) On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made from remaining Available Funds in the following amounts and order of
priority:
(i) first, to the Holders of the Class A-2 Certificates, the Class
A-2 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) second, to the extent of the portion, if any, of the Class A-2
Principal Distribution Amount remaining undistributed pursuant to clauses
(c)(II)(i) above on such Distribution Date, and after taking into account
the amount distributed to the Holders of the Class A-1 Certificates
pursuant to clause (c)(I)(i) above on such Distribution Date, to the
Holders of the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
97
(iii) third, to the holders of the Class A-1 Certificates, an amount
equal to the excess, if any, of (x) the amount required to be distributed
pursuant to clause (c)(I)(i) above for such Distribution Date over (y) the
sum of (A) the amount actually distributed pursuant to clause (c)(I)(i)
above from the Group I Principal Distribution Amount on such Distribution
Date and (B) the amount, if any, distributed to the Holders of the Class
A-1 Certificates pursuant to clause (c)(II)(ii) above on such Distribution
Date.
(III) On each Distribution Date (a) on or after the Stepdown Date
and (b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made from remaining Available Funds in the following
amounts and order of priority:
(i) first, to the Holders of the Class M-1 Certificates, the Class
M-1 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(ii) second, to the Holders of the Class M-2 Certificates, the Class
M-2 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) third, to the Holders of the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero; and
(iv) fourth, to the Holders of the Class M-4 Certificates, the Class
M-4 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero.
(d) On each Distribution Date, the Net Monthly Excess Cashflow shall
be distributed as follows:
(i) to the Holders of the Class or Classes of Certificates then
entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, distributable to such
Holders as part of the Group I Principal Distribution Amount and/or the
Group II Principal Distribution Amount as described under Section 4.01(b)
and Section 4.01(c) above;
(ii) to the Holders of the Class M-1 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(iii) to the Holders of the Class M-1 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(iv) to the Holders of the Class M-2 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(v) to the Holders of the Class M-2 Certificates, in an amount equal
to the Allocated Realized Loss Amount allocable to such Certificates;
98
(vi) to the Holders of the Class M-3 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(vii) to the Holders of the Class M-3 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(viii) to the Holders of the Class M-4 Certificates, in an amount
equal to the Unpaid Interest Shortfall Amount allocable to such
Certificates;
(ix) to the Holders of the Class M-4 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such
Certificates;
(x) to the Net WAC Rate Carryover Reserve Account, the amount by
which any Net WAC Rate Carryover Amounts for such Distribution Date exceed
the amounts received by the Trustee under the Cap Contract;
(xi) to the Holders of the Class C Certificates, the Monthly
Interest Distributable Amount for such Class and any remaining
Overcollateralization Release Amount for such Distribution Date;
(xii) if such Distribution Date follows the Prepayment Period during
which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage Loans, to the Holders of the Class P
Certificates, in reduction of the Certificate Principal Balance thereof,
until the Certificate Principal Balance thereof is reduced to zero;
(xiii) to the Holders of the Class X Certificates, any recoveries in
respect of the Class X Mortgage Loans; and
(xiv) any remaining amounts to the Holders of the Residual
Certificates (in respect of the appropriate Class R Interest).
On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee will first, withdraw from the
Net WAC Rate Carryover Reserve Account all income from the investment of funds
in the Net WAC Rate Carryover Reserve Account and distribute such amount to the
Holders of the Class C Certificates, and second, withdraw from the Net WAC Rate
Carryover Reserve Account, to the extent of amounts remaining on deposit
therein, the amount of any Net WAC Rate Carryover Amount for such Distribution
Date and distribute such amount in the following order of priority:
(A) first, to the Class A Certificates and the Mezzanine
Certificates, any related unpaid Net WAC Rate Carryover Amount (in each case
only up to a maximum amount equal to the Cap Amount for the related Class)
distributed in the following order of priority:
(i) concurrently, to the Class A-1 Certificates and the Class A-2
Certificates, on a pro rata basis based on the Cap Amount for each such
Class;
99
(ii) to the Class M-1 Certificates;
(iii) to the Class M-2 Certificates;
(iv) to the Class M-3 Certificates; and
(v) to the Class M-4 Certificates.
(B) second, to the Class A Certificates and the Mezzanine
Certificates, any related unpaid Net WAC Rate Carryover Amount (after taking
into account distributions pursuant to (A) above), distributed in the following
order of priority:
(i) concurrently, to the Class A-1 Certificates and the Class A-2
Certificates, on a pro rata basis based on the related unpaid Net WAC Rate
Carryover Amount for each such Class;
(ii) to the Class M-1 Certificates;
(iii) to the Class M-2 Certificates;
(iv) to the Class M-3 Certificates; and
(v) to the Class M-4 Certificates.
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Servicer Prepayment Charge Amounts paid by the Servicer during
the related Prepayment Period will be withdrawn from the Distribution Account
and distributed by the Trustee to the Holders of the Class P Certificates and
shall not be available for distribution to the Holders of any other Class of
Certificates. The payment of the foregoing amounts to the Holders of the Class P
Certificates shall not reduce the Certificate Principal Balances thereof.
(e) The Trustee shall make distributions in respect of a
Distribution Date to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution), in
the case of Certificateholders of the Regular Certificates, by check or money
order mailed to such Certificateholder at the address appearing in the
Certificate Register, or by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
(f) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository 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
100
provisions of the Certificates. None of the Trustee, the Depositor or the
Servicer shall have any responsibility therefor except as otherwise provided by
applicable law.
(g) Except as otherwise provided in Section 10.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Trustee shall, no
later than two days prior to the related Distribution Date, send, by overnight
delivery or by registered mail, to each Holder on such date of such Class of
Certificates a notice to the effect that:
(i) the Trustee expects that the final distribution with respect to
the Certificates of such Class will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office of
the Trustee therein specified, and
(ii) no interest shall accrue on such Certificates from and after
the end of the calendar month preceding such final Distribution Date.
SECTION 4.02. Reserved.
SECTION 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Servicer pursuant to Section 4.04(a), the Trustee shall
prepare and make available to each Holder of the Regular Certificates, the
Servicer and the Rating Agencies, a statement as to the distributions made on
such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Regular Certificates (other than the Class S
Certificates), separately identified, allocable to principal and the
amount of the distribution made to the Holders of the Class P Certificates
allocable to Prepayment Charges and Servicer Prepayment Charge Payment
Amounts;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Regular Certificates (other than the Class
P Certificates) allocable to interest, separately identified;
(iii) the Overcollateralized Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency Amount and the
Overcollateralization Target Amount as of such Distribution Date and the
Excess Overcollateralized Amount for the Mortgage Pool for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Servicer with respect to the related Due Period and such other customary
information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;
(v) the aggregate amount of Advances for the related Due Period;
101
(vi) the Pool Balance at the Close of Business at the end of the
related Due Period;
(vii) the number, aggregate principal balance, weighted average
remaining term to maturity and weighted average Mortgage Rate of the
Mortgage Loans as of the related Determination Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans that were (A) Delinquent (exclusive of Mortgage Loans in bankruptcy
or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to 89 days
and (3) 90 or more days, (B) as to which foreclosure proceedings have been
commenced and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90
or more days, (C) in bankruptcy and Delinquent (1) 30 to 59 days, (2) 60
to 89 days and (3) 90 or more days, in each case as of the Close of
Business on the last day of the calendar month preceding such Distribution
Date and (D) REO Properties;
(ix) the aggregate of any draws under the Mortgage Pool Insurance
Policy during the related Prepayment Period, and the remaining coverage
under the Mortgage Pool Insurance Policy following such draws;
(x) the total number and cumulative principal balance of all REO
Properties as of the Close of Business of the last day of the preceding
Prepayment Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;
(xiii) the aggregate amount of extraordinary Trust Fund expenses
withdrawn from the Collection Account for such Distribution Date;
(xiv) the Certificate Principal Balance of the Class A Certificates,
the Mezzanine Certificates and the Class C Certificates and the Notional
Amount of the Class S Certificates, after giving effect to the
distributions made on such Distribution Date;
(xv) the Monthly Interest Distributable Amount in respect of each
Class of Class A Certificates, the Class S Certificates, each Class of
Mezzanine Certificates and the Class C Certificates for such Distribution
Date and the Unpaid Interest Shortfall Amount, if any, with respect to the
Class A Certificates, the Class S Certificates and the Mezzanine
Certificates for such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.26;
(xvii) the Credit Enhancement Percentage for such Distribution Date;
102
(xviii) any Overcollateralization Target Amount, Overcollateralized
Amount and Overcollateralization Deficiency Amount after giving effect to
the distribution of principal on such Distribution Date;
(xix) when the Stepdown Date or a Trigger Event has occurred;
(xx) the Available Funds;
(xxi) the respective Pass-Through Rates applicable to each Class of
Class A Certificates, each Class of Mezzanine Certificates and the Class C
Certificates for such Distribution Date and the Pass- Through Rate
applicable to each Class of Class A Certificates and each Class of
Mezzanine Certificates for the immediately succeeding Distribution Date;
(xxii) the Net WAC Rate Carryover Amount for each Class of Class A
Certificates and each Class of Mezzanine Certificates, if any, for such
Distribution Date and the amount remaining unpaid after reimbursements
therefor on such Distribution Date; and
(xxiii) payments, if any, made under the Cap Contract.
The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and the Rating Agencies via the
Trustee's internet website. The Trustee's internet website shall initially be
located at "xxx.xxxxxxx.xxx". Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution option are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the way such
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Trustee shall provide timely
and adequate notification to all above parties regarding any such changes. As a
condition to access to the Trustee's internet website, the Trustee may require
registration and the acceptance of a disclaimer. The Trustee will not be liable
for the dissemination of information in accordance with this Agreement. The
Trustee shall also be entitled to rely on but shall not be responsible for the
content or accuracy of any information provided by third parties for purposes of
preparing the Distribution Date statement and may affix thereto any disclaimer
it deems appropriate in its reasonable discretion (without suggesting liability
on the part of any other party thereto).
In the case of information furnished pursuant to subclauses (i)
through (iii) above, the amounts shall be expressed in a separate section of the
report as a dollar amount for each Class for each $1,000 original dollar amount
as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall, upon written request, furnish to each Person
who at any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for such
calendar year or
103
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.
(c) On each Distribution Date, the Trustee shall make available to
the Residual Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall deliver to each Person who at any time during
the calendar year was a Residual Certificateholder, if requested in writing by
such Person, such information as is reasonably necessary to provide to such
Person a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such Person was a Residual Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to Certificateholders by
the Trustee pursuant to any requirements of the Code as from time to time in
force.
SECTION 4.04. Remittance Reports; Advances.
(a) Not later than 2:00 p.m. New York time on the third Business Day
following each Determination Date but in no event later than the 20th day of the
each month (or if such 20th day is not a Business Day, the preceding Business
Day), the Servicer shall deliver to the Trustee by telecopy or electronic mail
(or by such other means as the Servicer and the Trustee may agree from time to
time) a Remittance Report with respect to the related Distribution Date. Not
later than the 20th day of each month (or if such 20th day is not a Business
Day, the preceding Business Day), the Servicer shall deliver or cause to be
delivered to the Trustee in addition to the information provided on the
Remittance Report, such other information reasonably available to it with
respect to the Mortgage Loans as the Trustee may reasonably require to perform
the calculations necessary to make the distributions contemplated by Section
4.01 and to prepare the statements to Certificateholders contemplated by Section
4.03. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Servicer.
In addition, the Servicer will provide to the Depositor, on a
monthly basis, information regarding the Mortgage Loans reasonably requested by
the Depositor.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of scheduled monthly payments of interest (net of the related
Servicing Fee), due during the related Due Period in respect of the Mortgage
Loans, which scheduled monthly payments of interest were delinquent on a
contractual basis as of the Close of Business on the related Determination Date;
provided however, that with respect to any Balloon Mortgage Loan that is
delinquent on its maturity date, the Servicer will not be required to advance
the related Balloon Payment but will be required to continue to make Advances in
accordance with this Section 4.04(b) with respect to such Balloon Mortgage Loan
in an amount equal to an assumed scheduled interest that would otherwise be due
based on the original
104
amortization schedule for that Balloon Mortgage Loan (with interest at the
Mortgage Rate less the Servicing Fee Rate), (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related Due
Period and as to which REO Property an REO Disposition did not occur during the
related Due Period, an amount equal to the excess, if any, of the REO Imputed
Interest on such REO Property for the most recently ended calendar month, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.23 for distribution on such Distribution Date and (iii)
with respect to each previously liquidated Mortgage Loan and REO Property as to
which Mortgage Loan or REO Property, as the case may be, full settlement of a
claim under the Mortgage Pool Insurance Policy was pending as of the end of the
most recently ended calendar month, one month's interest on the Principal
Balance thereof (net of related Servicing Fees).
On or before 1:00 p.m. New York time on the Servicer Remittance
Date, the Servicer shall remit in immediately available funds to the Trustee for
deposit in the Distribution Account an amount equal to the aggregate amount of
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Distribution Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case it will cause to be made an appropriate entry in the records of
Collection Account that amounts held for future distribution have been, as
permitted by this Section 4.04, used by the Servicer in discharge of any such
Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the
total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties. Any amounts held for future distribution used by the
Servicer to make an Advance as permitted in the preceding sentence shall be
appropriately reflected in the Servicer's records and replaced by the Servicer
by deposit in the Collection Account on or before any future Servicer Remittance
Date to the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Servicer Remittance
Date) shall be less than the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date
if such amounts held for future distributions had not been so used to make
Advances. The Trustee will provide notice to the Servicer by telecopy by the
Close of Business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Trustee on such date is less than the Advances
required to be made by the Servicer for the related Distribution Date, as set
forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until 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 or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance or Servicing Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate of the Servicer delivered to the Depositor and the Trustee.
Furthermore, the Servicer shall not be required to advance Relief Act Interest
Shortfalls or shortfalls resulting from payments made under the Mortgage Pool
Insurance Policy.
105
SECTION 4.05. [Reserved]
SECTION 4.06. Net WAC Rate Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Net WAC Rate
Carryover Reserve Account, Xxxxx Fargo Bank Minnesota, National Association, as
Trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust
2003-FFC, Asset-Backed Certificates, Series 2003-FFC." On the Closing Date, the
Depositor will deposit, or cause to be deposited, into the Net WAC Rate
Carryover Reserve Account $1,000. In addition the amount deposited in the Net
WAC Rate Carryover Reserve Account will be increased by any payments received by
the Trustee under the Cap Contract and deposited into the Net WAC Rate Carryover
Reserve Account. All amounts deposited in the Net WAC Rate Carryover Reserve
Account shall be distributed to the Holders of the Class A Certificates and the
Mezzanine Certificates in the manner set forth in Section 4.01(d).
On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class C Certificateholders
to, and therefore will, deposit into the Net WAC Rate Carryover Reserve Account
the amounts described in Section 4.01(d)(xi), rather than distributing such
amounts to the Class C Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the Class
A Certificates and the Mezzanine Certificates, and will distribute such amounts
to the Holders of the Class A Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(d). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Net WAC Rate Carryover Reserve Account on behalf of the Class C
Certificateholders, from amounts otherwise distributable to the Class C
Certificateholders, an amount such that when added to other amounts already on
deposit in the Net WAC Rate Carryover Reserve Account, the aggregate amount on
deposit therein is equal to $1,000.
On each Distribution Date, any amounts remaining in the Net WAC Rate
Reserve Account (other than $1,000 as set forth above) after the payment of any
Net WAC Rate Carryover Amounts on the Class A Certificates and the Mezzanine
Certificates for such Distribution Date, shall be payable to the Holders of the
Class C Certificates.
For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts deposited into the Net WAC Rate Carryover
Reserve Account (other than the initial deposit therein of $1,000) shall be
treated as amounts distributed by REMIC 3 to the Holder of the Class C Interest
and by REMIC 4 to the Holders of the Class C Certificates. The Net WAC Rate
Carryover Reserve Account will be an "outside reserve fund" within the meaning
of Treasury regulation Section 1.860G-2(h). Upon the termination of the Trust,
or the payment in full of the Class A Certificates and the Mezzanine
Certificates, all amounts remaining on deposit in the Net WAC Rate Carryover
Reserve Account will be released by the Trust and distributed to the Class C
Certificateholders or their designees. The Net WAC Rate Carryover Reserve
Account will be part of the Trust but not part of any REMIC and any payments to
the Holders of the Class A Certificates or the Mezzanine
106
Certificates of Net WAC Rate Carryover Amounts will not be payments with respect
to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).
By accepting a Class C Certificate, each Class C Certificateholder
hereby agrees to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Net WAC Rate Carryover Reserve Account the amounts described
above on each Distribution Date as to which there is any Net WAC Rate Carryover
Amount rather than distributing such amounts to the Class C Certificateholders.
By accepting a Class C Certificate, each Class C Certificateholder further
agrees that such direction is given for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by such acceptance.
At the direction of the Holders of a majority in Percentage Interest
in the Class C Certificates, the Trustee shall direct any depository institution
maintaining the Net WAC Rate Carryover Reserve Account to invest the funds in
such account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in Permitted Investments managed by the Trustee
or an Affiliate of the kind described in clause (vi) of the definition of
Permitted Investments.
For federal tax return and information reporting, the right of the
Holders of the Class A Certificates and the Holders of the Mezzanine
Certificates to receive payments from the Net WAC Rate Carryover Reserve Account
in respect of any Net WAC Rate Carryover Amount shall be assigned a value of
zero.
SECTION 4.07. Distributions on the REMIC Regular Interests.
(a) On each Distribution Date, the Trustee shall cause the Available
Funds from the Distribution Account to make the following disbursements and
transfers, in the following order of priority, to be distributed by REMIC 1 to
REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(1)(i) first, to the Holders of REMIC 1 Regular Interest LT1A, REMIC
1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular
Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest
LT1F and REMIC 1 Regular Interest LT1P in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates; and
107
(ii) to the Holders of REMIC 1 Regular Interest LT1P, on the
Distribution Date immediately following the expiration of the latest
Prepayment Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter until $100 has been distributed pursuant to
this clause;
(2) second, to the Holders of REMIC 1 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (1) above, allocated
as follows:
With respect to the Group I Mortgage Loans:
(a) to the Holders of REMIC 1 Regular Interest LT1A, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A is
reduced to zero;
(b) to the Holders of REMIC 1 Regular Interest LT1B, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B is
reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT1C, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1C is
reduced to zero; and
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest).
With respect to the Group II Mortgage Loans:
(a) to the Holders of REMIC 1 Regular Interest LT1D, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D is
reduced to zero;
(b) to the Holders of REMIC 1 Regular Interest LT1E, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E is
reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT1F , until
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1F is reduced to zero; and
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest)..
On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1P. The payment of the foregoing amounts to the
108
Holders of REMIC 1 Regular Interest LT1P shall not reduce the Uncertificated
Principal Balance thereof.
(b) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 2
to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class R Certificates
(in respect of the Class R-2 Interest), as the case may be:
(i) first, to the Holders of REMIC 2 Regular Interest LT2S1 and
REMIC 2 Regular Interest LT2S2, in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any
amounts in respect thereof remaining unpaid from previous Distribution
Dates and then to the extent of Available Funds, to Holders of REMIC 2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2A1, REMIC 2 Regular
Interest LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest
LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular Interest LT2M4,
REMIC 2 Regular Interest LT2ZZ and REMIC 2 Regular Interest LT2P, pro
rata, in an amount equal to (A) the Uncertificated Accrued Interest for
such Distribution Date, plus (B) any amounts in respect thereof remaining
unpaid from previous Distribution Dates. Amounts payable as Uncertificated
Accrued Interest in respect of REMIC 2 Regular Interest LT2ZZ shall be
reduced and deferred when the REMIC 2 Overcollateralization Amount is less
than the REMIC 2 Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the Maximum Uncertificated Accrued
Interest Deferral Amount; and
(ii) second, to the Holders of REMIC 2 Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution
Date after the distributions made pursuant to clause (i) above, allocated
as follows:
(a) to the Holders of REMIC 2 Regular Interest LT2AA and REMIC
2 Regular Interest LT2P, 98.00% of such remainder, until the
Uncertificated Principal Balance of such Uncertificated REMIC 2
Regular Interest is reduced to zero; provided, however, that REMIC 2
Regular Interest LT2P shall not be reduced until the Distribution
Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any
Distribution Date thereafter, at which point such amount shall be
distributed to REMIC 2 Regular Interest LT2P, until $100 has been
distributed pursuant to this clause;
(b) to the Holders of REMIC 2 Regular Interest LT2A1, REMIC 2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2
Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3 and REMIC 2
Regular Interest LT2M4, 1.00% of such remainder, in the same
proportion as principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Principal Balances of such
REMIC 2 Regular Interests are reduced to zero;
(c) to the Holders of REMIC 2 Regular Interest LT2ZZ, 1.00% of
such remainder, until the Uncertificated Principal Balance of such
REMIC 2 Regular Interest is reduced to zero; and
109
(d) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest);
provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 2 Regular Interest LT2AA and REMIC 2 Regular Interest
LT2P, in that order and (ii) REMIC 2 Regular Interest LT2ZZ, respectively;
provided that REMIC 2 Regular Interest LT2P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 2 Regular
Interest LT2P, until $100 has been distributed pursuant to this clause.
SECTION 4.08. Allocation of Realized Losses.
(a) All Realized Losses on the Mortgage Loans allocated to any
Regular Certificate shall be allocated by the Trustee on each Distribution Date
as follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and sixth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated; any allocation of Realized Losses to a Class
C Certificates shall be made by reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(xi). No allocations of any Realized Losses
shall be made to the Certificate Principal Balances of the Class A Certificates
or the Class P Certificates.
(b) All Realized Losses on the Group I Mortgage Loans shall be
deemed to have been allocated by the Trustee on each Distribution Date to REMIC
1 Regular Interest LT1A until the Uncertificated Principal Balance has been
reduced to zero, then to REMIC 1 Regular Interest LT1B until the Uncertificated
Principal Balance has been reduced to zero and then to REMIC 1 Regular Interest
LT1C until the Uncertificated Principal Balance has been reduced to zero. All
Realized Losses on the Group II Mortgage Loans shall be deemed to have been
allocated by the Trustee on each Distribution Date to REMIC 1 Regular Interest
LT1A until the Uncertificated Principal Balance has been reduced to zero, then
to REMIC 1 Regular Interest LT1D until the Uncertificated Principal Balance has
been reduced to zero and then to REMIC 1 Regular Interest LT1E until the
Uncertificated Principal Balance has been reduced to zero.
110
(c) All Realized Losses on the Mortgage Loans shall be deemed to
have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LT2AA
and REMIC 2 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC
2 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA and REMIC 2
Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC 2 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M4 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M4 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2M3 has been reduced to zero; fifth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2
Regular Interest LT2M2 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2M2 has been reduced to zero; and sixth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M1 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M1 has been
reduced to zero.
111
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
Each of the Class A Certificates, the Class S Certificates, the
Mezzanine Certificates, the Class P Certificates, the Class C Certificates and
the Residual Certificates shall be substantially in the forms annexed hereto as
exhibits, and shall, on original issue, be executed, authenticated and delivered
by the Trustee to or upon the order of the Depositor concurrently with the sale
and assignment to the Trustee of the Trust Fund. The Class A Certificates and
the Mezzanine Certificates shall be initially evidenced by one or more
Certificates representing a Percentage Interest with a minimum dollar
denomination of $50,000 and integral dollar multiples of $1.00 in excess
thereof, except that one Certificate of each such Class of Certificates may be
in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Certificate Principal
Balance or Notional Amount of such Class on the Closing Date. The Class P
Certificates, the Class C Certificates and the Residual Certificates are
issuable in any Percentage Interests; provided, however, that the sum of all
such percentages for each such Class totals 100% and no more than ten
Certificates of each Class may be issued and outstanding at any one time.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Class A Certificates
and the Mezzanine Certificates shall be Book-Entry Certificates. The other
Classes of Certificates shall not be Book-Entry Certificates.
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided.
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
112
behalf of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, (i) with respect to each Class R Certificate, the holder thereof
may exchange, in the manner described above, such Class R Certificate for three
separate certificates, each representing such holder's respective Percentage
Interest in the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest, respectively, in each case that was evidenced by the Class R
Certificate being exchanged and (ii) with respect to each Class R-X Certificate,
the holder thereof may exchange, in the manner described above, such Class R-X
Certificate for two separate certificates, each representing such holder's
respective Percentage Interest in the Class R-4 Interest and the Class R-5
Interest, respectively, in each case that was evidenced by the Class R-X
Certificate being exchanged.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
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
113
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 the Book-Entry Certificates representing
Percentage Interests of such Classes aggregating not less than 51% advise the
Trustee and Depository through the Financial Intermediaries and the Depository
Participants in writing that the continuation of a book-entry system through the
Depository to the exclusion of definitive, fully registered certificates (the
"Definitive Certificates") to Certificate Owners is no longer in the best
interests of the Certificate Owners. Upon surrender to the Certificate Registrar
of the Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall, at the
Depositor's expense, in the case of (i) or (ii) above, or the Servicer's
expense, in the case of (iii) above, execute on behalf of the Trust and
authenticate the Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates, the Trustee, the Certificate
Registrar, the Servicer, any Paying Agent and the Depositor shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Class C
Certificate, Class P Certificate, Class X Certificate or Residual Certificate
shall be made unless such disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and any
applicable state securities laws or is made in accordance with the 1933 Act and
laws. In the event of any such transfer, except with respect to the initial
transfer of any Class C Certificate, Class P Certificate or Residual
Certificates by the Depositor (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Trustee, in
substantially the form attached hereto as Exhibit J) under the 1933 Act, the
Trustee and the Depositor shall require a written Opinion of Counsel (which may
be in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall not be an expense of the Trustee or the Depositor or
(ii) the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached hereto as Exhibit L) and the
transferee to execute an investment letter (in substantially the form attached
hereto as Exhibit J) acceptable to and in form and substance reasonably
satisfactory to the Depositor and the Trustee certifying to the Depositor and
the Trustee the facts surrounding such transfer, which investment letter shall
not be an expense of the Trustee or the Depositor. The Holder of a Class C
Certificate, Class P Certificate or Residual Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
114
Notwithstanding the foregoing, no certification or Opinion of
Counsel described in this Section 5.02(d) will be required in connection with
the transfer, on the Closing Date, of any Class R Certificate by the Depositor
to an "accredited investor" within the meaning of Rule 501 of the 1933 Act.
No transfer of a Class C Certificate, Class P Certificate, Class X
Certificate or Residual Certificate or any interest therein shall be made to any
Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly
or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "Plan Assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as
certified by such transferee in the form of Exhibit M, unless the Depositor, the
Trustee and the Servicer are provided with an Opinion of Counsel which
establishes to the satisfaction of the Depositor, the Trustee and the Servicer
that the purchase of such Certificates is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Depositor, the Servicer, the Trustee
or the Trust Fund to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Servicer, the Trustee or the Trust Fund. Neither a
certification nor an Opinion of Counsel will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.
Each Transferee of a Mezzanine Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000) and PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002)
(the "Exemption"), and that it understands that there are certain conditions to
the availability of the Exemption including that such Certificate must be rated,
at the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60, and (iii) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied.
If any Mezzanine Certificate, Class C Certificate, Class P
Certificate, Class X Certificate or Residual Certificate or any interest therein
is acquired or held in violation of the provisions of the preceding paragraphs,
the next preceding permitted beneficial owner will be treated as the beneficial
owner of that Certificate retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding of
any such Certificate or interest therein was effected in violation of the
provisions of the preceding paragraph shall indemnify and hold harmless the
Depositor, the Servicer, the Trustee and the Trust from and
115
against any and all liabilities, claims, costs or expenses incurred by those
parties as a result of that acquisition or holding.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall as a condition to
registration of the transfer, require delivery to it, in form and
substance satisfactory to it, of each of the following:
(A) an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that such transferee is a Permitted
Transferee and that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the
proposed transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee; and
(B) a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section shall
be absolutely null and void and shall vest no rights in the purported
transferee. If any purported transferee shall, in violation of the provisions of
this Section, become a Holder of a Residual Certificate, then the prior Holder
of such Residual Certificate that is a Permitted Transferee shall, upon
discovery that the registration of transfer of such Residual Certificate was not
in fact permitted by this Section, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Residual
Certificate. The Trustee shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section or for making any distributions due on such Residual Certificate
to the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made on
such Residual Certificate. Any such distributions so recovered by the Trustee
shall be distributed
116
and delivered by the Trustee to the prior Holder of such Residual Certificate
that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee shall have the right but not the obligation,
without notice to the Holder of such Residual Certificate or any other Person
having an Ownership Interest therein, to notify the Depositor to arrange for the
sale of such Residual Certificate. The proceeds of such sale, net of commissions
(which may include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be remitted by
the Trustee to the previous Holder of such Residual Certificate that is a
Permitted Transferee, except that in the event that the Trustee determines that
the Holder of such Residual Certificate may be liable for any amount due under
this Section or any other provisions of this Agreement, the Trustee may withhold
a corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be determined in
the sole discretion of the Trustee and it shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a result of its
exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the restrictions in
this Section, then the Trustee upon receipt of reasonable compensation will
provide to the Internal Revenue Service, and to the persons specified in
Sections 860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual interests
to disqualified organizations.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Trustee, in form and substance satisfactory to the Trustee, (i)
written notification from each Rating Agency that the removal of the
restrictions on transfer set forth in this Section will not cause such Rating
Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be canceled by the Certificate Registrar and disposed of pursuant
to its standard procedures.
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange
117
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Servicer, the Depositor, the Trustee, the
Certificate Registrar or any Paying Agent may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Servicer, the Trust, the
Trustee nor any agent of any of them shall be affected by notice to the
contrary.
SECTION 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.
118
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
SECTION 6.01. Liability of the Servicer and the Depositor.
The Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by Servicer
herein. The Depositor shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Depositor.
SECTION 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor.
Any entity into which the Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Servicer or the Depositor shall be a party, or any
corporation succeeding to the business of the Servicer or the Depositor, shall
be the successor of the Servicer or the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that the Servicer determines that it will no longer
engage in the business of servicing mortgage loans, the Servicer may assign its
rights under this Agreement, provided that, (i) the Depositor in its sole
discretion has consented, (ii) the Rating Agencies' ratings of the Offered
Certificates and each class of notes issued pursuant to an Indenture between
First Xxxxxxxx XXX Trust 2003-FFC as issuer and the Trustee as indenture trustee
in effect immediately prior to such action will not be qualified, reduced or
withdrawn as a result thereof (as evidenced by a letter to such effect from the
Rating Agencies) and (iii) the Servicer shall be liable for all Servicing
Transfer Costs, provided further, that the Servicer shall indemnify and hold the
Trust Fund, the Trustee, the Depositor, and sub-servicer, the successor servicer
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 Trust Fund, the
Trustee, the Depositor, and sub-servicer, the successor servicer and each
Certificateholder may sustain in any way related such assignment. No assignment
by the Servicer shall become effective until a successor servicer acceptable to
the Depositor and the Trustee shall have assumed the Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement. Any such assignment shall not relieve the Servicer of responsibility
for any of the obligations specified herein except to the extent that such
responsibilities have been expressly assumed by the successor servicer.
SECTION 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer or the Depositor nor any of the directors or
officers or employees or agents of the Servicer or the Depositor shall be under
any liability to the Trust or the
119
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer or the Depositor in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer, the Depositor or any such Person against any
liability which would otherwise be imposed by reason of its willful misfeasance,
bad faith or negligence in the performance of duties of the Servicer or the
Depositor, as the case may be, or by reason of its reckless disregard of its
obligations and duties of the Servicer or the Depositor, as the case may be,
hereunder; provided, further, that this provision shall not be construed to
entitle the Servicer to indemnity in the event that amounts advanced by the
Servicer to retire any senior lien exceed Liquidation Proceeds (in excess of
related liquidation expenses) realized with respect to the related Mortgage
Loan. The Servicer and any director or officer or employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer and the Depositor, and any director or officer or employee or agent
of the Servicer or the Depositor, shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with (i)
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 or by reason of its reckless disregard of obligations and
duties hereunder or by reason of its failure to perform its obligations or
duties hereunder and (ii) any breach of a representation or warranty regarding
the Mortgage Loans. The Servicer or the Depositor may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the
Servicer acts without the consent of the Holders of Certificates entitled to at
least 51% of the Voting Rights, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Servicer shall be entitled to be reimbursed
therefor from the Collection Account as and to the extent provided in Section
3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). This paragraph shall apply to the Servicer
solely in its capacity as Servicer hereunder and in no other capacities.
SECTION 6.04. Servicer Not to Resign.
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, (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 Certificates and (c) the Mortgage Pool Insurer shall have
delivered to the Trustee its written
120
approval as contemplated under the Mortgage Pool Insurance Policy; 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.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Servicer of its liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of Section 6.04.
Except as provided in Section 3.02, no such delegation is permitted that results
in the delegee subservicing any Mortgage Loans. The Servicer shall provide the
Trustee with 60 days prior written notice prior to the delegation of any of its
duties to any Person other than any of the Servicer's Affiliates or their
respective successors and assigns.
SECTION 6.06. Reserved.
SECTION 6.07. Inspection.
The Servicer, in its capacity as Servicer, shall afford the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the Servicer in respect of its rights and obligations hereunder
and access to officers of the Servicer responsible for such obligations. Upon
request, the Servicer shall furnish to the Trustee its most recent publicly
available financial statements and such other information relating to its
capacity to perform its obligations under this Agreement.
121
ARTICLE VII
DEFAULT
SECTION 7.01. Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or (B) any
other failure by the Servicer to deposit in the Collection Account or the
Distribution Account any deposit required to be made under the terms of
this Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure shall have been
given to the Servicer by the Trustee or to the Trustee by any Holders of a
Regular Certificate evidencing at least 25% of the Voting Rights; or
(ii) The failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or the
failure by the Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer as
set forth in this Agreement, which failure continues unremedied for a
period of 30 days (or if such failure or breach cannot be remedied within
30 days, then such remedy shall have been commenced within 30 days and
diligently pursued thereafter; provided, however, that in no event shall
such failure or breach be allowed to exist for a period of greater than 90
days) after the date (A) on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer
by the Trustee or to the Trustee by any Holders of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) of actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged,
unbonded or unstayed for a period of 60 days; or the Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization
122
statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
(b) then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 11:00 A.M., New York time, on the Business Day immediately following the
Servicer Remittance Date (provided the Trustee shall give the Servicer, and the
Servicer shall have received, notice of such failure to advance by 5:00 P.M. New
York time on the Servicer Remittance Date), the Trustee shall terminate all of
the rights and obligations of the Servicer under this Agreement and the Trustee,
or a successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Servicer and (y) in the case of (i)(B), (ii), (iii), (iv) and (v)
above, the Trustee shall, at the direction of the Holders of each Class of
Regular Certificates evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Servicer (and to the Trustee if
given by Holders of Certificates), terminate all of the rights and obligations
of the Servicer as servicer under this Agreement. Any such notice to the
Servicer shall also be given to each Rating Agency, the Depositor and the
Servicer. On or after the receipt by the Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority and power
of the Servicer under this Agreement, whether with respect to the Certificates
or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section; and, without limitation, and the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and related
documents or otherwise. The Servicer agrees to cooperate with the Trustee (or
the applicable successor Servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee of all documents and records requested
by it to enable it to assume the Servicer's functions under this Agreement
within ten Business Days subsequent to such notice, the transfer within one
Business Day subsequent to such notice to the Trustee (or the applicable
successor Servicer) for the administration by it of all cash amounts that shall
at the time be held by the Servicer and to be deposited by it in the Collection
Account, the Distribution Account, any REO Account or any 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 Mortgage Files to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer (or if the
predecessor Servicer is the Trustee, the initial Servicer) upon presentation of
reasonable documentation of such costs and expenses and to the extent not paid
by the Servicer, by the Trust.
Notwithstanding the termination of the Servicer hereunder, the
Servicer shall be entitled to reimbursement of all unpaid Servicing Fees and all
unreimbursed Advances and Servicing Advances in the manner and at the times set
forth herein.
SECTION 7.02. Trustee to Act; Appointment of Successor.
123
(a) From the time the Servicer (and the Trustee, if notice is sent
by the Holders) receives a notice of termination pursuant to Section 7.01 or
6.04, the Trustee (or such other successor Servicer as is approved in accordance
with this Agreement) shall be the successor in all respects to the Servicer in
its capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof arising on and after its succession. Notwithstanding the foregoing, the
parties hereto agree that the Trustee, in its capacity as successor Servicer,
immediately will assume all of the obligations of the Servicer to make advances.
Notwithstanding the foregoing, the Trustee, in its capacity as successor
Servicer, shall not be responsible for the lack of information and/or documents
that it cannot obtain through reasonable efforts. It is understood and agreed by
the parties hereto that there will be a period of transition (not to exceed 90
days) before the transition of servicing obligations is fully effective. As
compensation therefor, the Trustee (or such other successor Servicer) shall be
entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies and the Mortgage
Pool Insurer has approved of such successor Servicer in writing. 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
Trustee and such successor shall agree, not to exceed the Servicing Fee). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer to pay any deductible under an insurance policy pursuant
to Section 3.14 or to reimburse the Trustee pursuant to Section 3.06), nor shall
any successor Servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by such Servicer of any of its representations or
warranties contained herein or in any related document or agreement. The Trustee
and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. All Servicing Transfer
Costs shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the successor Servicer
or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).
(b) Any successor to the Servicer, including the Trustee, shall
during the term of its service as servicer continue to service and administer
the Mortgage Loans for the benefit of Certificateholders, and maintain in force
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and a fidelity bond in
respect
124
of its officers, employees and agents to the same extent as the Servicer is so
required pursuant to Section 3.14.
SECTION 7.03. Waiver of Defaults .
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the 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) Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to all Certificateholders notice of such occurrence
unless such default or Servicer Event of Termination shall have been waived or
cured.
SECTION 7.05. Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
125
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination has
occurred (which has not been cured) of which a Responsible Officer has
knowledge, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) prior to the occurrence of a Servicer Event of Termination, and
after the curing of all such Servicer Events of Termination which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
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
126
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) through (v) of Section 7.01(a) unless a Responsible Officer
of the Trustee at the Corporate Trust Office obtains actual knowledge of
such failure or the Trustee receives written notice of such failure from
the Servicer or the Majority Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties, and
the manner of obtaining consents and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such
reasonable regulations as the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
the right of the Trustee to perform any discretionary act enumerated in
this Agreement shall 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;
127
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding. The reasonable expense of
every such examination shall be paid by the Servicer or, if paid by the
Trustee, shall be reimbursed by the Servicer upon demand and, if not
reimbursed by the Servicer, shall be reimbursed by the Trust. Nothing in
this clause (v) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding
the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no liability
and makes no representation as to any acts or omissions hereunder of the
Servicer until such time as the Trustee may be required to act as Servicer
pursuant to Section 7.02 and thereupon only for the acts or omissions of
the Trustee as successor Servicer;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage or any Mortgage Loan, or the
perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence,
128
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),
any Sub-Servicer or any Mortgagor; any action of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02), or
any Sub- Servicer taken in the name of the Trustee; the failure of the Servicer
or any Sub-Servicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of the
Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement, including, without limitation, the Trustee's duty to review the
Mortgage Files pursuant to Section 2.01. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder (unless the Trustee shall have
become the successor Servicer).
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Servicer, the Depositor or their Affiliates.
SECTION 8.05. Trustee Fee and Expenses.
(a) The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee. The Trustee, or any
director, officer, employee or agent of the Trustee, shall be indemnified by
REMIC 1 and held harmless against any loss, liability or expense (not including
expenses and disbursements incurred or made by the Trustee, including the
compensation and the expenses and disbursements of its agents and counsel, in
the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) resulting
from the Servicer's actions or omissions in connection with this Agreement and
the Mortgage Loans for which the Trustee is indemnified under Section 8.05(b),
(ii) that constitutes a specific liability of the Trustee under this Agreement
or (iii) any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence of the Trustee in the performance of its
duties hereunder or by reason of the Trustee's reckless disregard of obligations
and duties hereunder or as a result of a breach of the Trustee's obligations
under Article X hereof. Any amounts payable to the Trustee, or any director,
officer, employee or agent of the Trustee, in respect of the indemnification
provided
129
by this Section 8.05(a), or pursuant to any other right of reimbursement from
the Trust Fund that the Trustee, or any director, officer, employee or agent of
the Trustee, may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.
(b) The Servicer agrees to indemnify the Trustee or any director,
officer, employee or agent of the Trustee from, and hold it harmless against,
any loss, liability or expense resulting from a breach of the Servicer's
obligations and duties under this Agreement. Such indemnity shall survive the
termination or discharge of this Agreement and the resignation or removal of the
Trustee and the Servicer for actions prior to such resignation or removal. Any
payment hereunder made by the Servicer to the Trustee shall be from the
Servicer's own funds, without reimbursement from the Trust Fund therefor.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such entity publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. The principal office of the Trustee (other than the
initial Trustee) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee is appointed Trustee
to the effect that the Trust will not be a taxable entity under the laws of such
state. In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee shall resign immediately
in the manner and with the effect specified in Section 8.07.
SECTION 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Depositor or
the Servicer may remove the Trustee. If the Depositor or the Servicer removes
the Trustee under the authority of the immediately preceding sentence, the
130
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
The Majority Certificateholders may at any time remove the Trustee
by written instrument or instruments delivered to the Servicer, the Depositor
and the Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
SECTION 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Servicer and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of 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.
131
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
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Servicer. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06, and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required under
Section 8.08. The Servicer shall be responsible for the fees of any co-trustee
or separate trustee appointed hereunder.
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
132
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor and the Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
SECTION 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the 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. Upon request, the Trustee shall furnish the Depositor, the Servicer and
any requesting Certificateholder with its most recent financial statements. The
Trustee shall cooperate fully with the Seller, the Servicer, the Depositor and
such Certificateholder and shall make available to the Seller, the Servicer, the
Depositor and such Certificateholder for review and copying such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
SECTION 8.13. Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer or the Depositor hereunder shall occur and be continuing, the Trustee,
shall, at the direction of the Majority
133
Certificateholders, or may, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee and the Certificateholders.
SECTION 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
134
ARTICLE IX
REMIC ADMINISTRATION
SECTION 9.01. REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall
be made by the Trustee on Form 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to each REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the 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, sign and file, all of the REMICs'
federal and state tax and information returns (including Form 8811) as the
direct representative each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as defined
in the REMIC Provisions (the "Tax Matters Person") with respect to each REMIC
and shall act as Tax Matters Person for each REMIC. The Trustee, as agent for
the Tax Matters Person, shall perform on behalf of each REMIC all reporting and
other tax compliance duties that are the responsibility of such REMIC under the
Code, the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the Treasury
or other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to any
disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions. The
Trustee, as agent for the Tax Matters Person, shall represent each REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC, enter into settlement agreements with any
government taxing agency, extend any statute of limitations relating to any item
of any REMIC and otherwise act on behalf of any REMIC in relation to any tax
matter involving the Trust.
135
(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer nor the Holder of any Residual Certificate shall take
any action, cause any REMIC created hereunder to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of such
REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC
created hereunder or the assets therein, or causing such REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, any
Holder of a Residual Certificate will consult with the Trustee and the Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to any REMIC, and no
such Person shall take any such action or cause any REMIC to take any such
action as to which the Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Servicer, the Servicer agrees to pay on behalf of such REMIC
when due, any and all state and local taxes imposed as a result of such a
determination, in the event that the Holder of the related Residual Certificate
fails to pay such taxes, if any, when imposed.
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to eligible substitute mortgage loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
136
(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 Officers'
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee will apply for an Employee Identification Number
from the Internal Revenue Service via a Form SS-4 or other acceptable method for
all tax entities and shall complete the Form 8811.
(m) The parties to this Agreement have entered into this Agreement
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Grantor Trust Fund will qualify as a grantor
trust for federal income tax purposes under subpart E, part I of subchapter J of
the Code and not as an association taxable as a corporation or as a partnership.
The parties hereto (in accordance with this Section 9.01), by entering into this
Agreement, agree to treat the Grantor Trust Fund for federal, state and local
income, single business and franchise tax purposes as a grantor trust for
federal income tax purposes under subpart E, part I of subchapter J of the Code
and not as an association taxable as a corporation or as a partnership.
SECTION 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of any REMIC created hereunder pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Distribution Account for gain, nor accept any contributions
to either REMIC after the Closing Date, unless it has received an Opinion of
Counsel (at the expense of the party causing such sale, disposition, or
substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC created hereunder as a
REMIC or of the interests therein other than the Residual Certificates as the
regular interests therein, (b) affect the distribution of interest or principal
on the Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause any REMIC created hereunder to be subject to a tax on prohibited
transactions or prohibited contributions pursuant to the REMIC Provisions.
SECTION 9.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
(a) In the event that any REMIC fails to qualify as a REMIC, loses
its status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Servicer of its duties and obligations set
forth herein, the Servicer shall indemnify the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses ("Losses")
resulting from such negligence; provided, however, that the Servicer shall not
be liable for any such Losses attributable to the action or inaction of the
Trustee, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
any such Person on
137
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).
(b) In the event that any REMIC fails to qualify as a REMIC, loses
its status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Trustee of its duties and obligations set
forth herein, the Trustee shall indemnify the Trust Fund against any and all
Losses resulting from such negligence; provided, however, that the Trustee shall
not be liable for any such Losses attributable to the action or inaction of the
Servicer, the Depositor or the Holder of such Residual Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
any such Person on which the Trustee has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Trustee have any
liability (1) for any action or omission that is taken in accordance with and in
compliance with the express terms of, or which is expressly permitted by the
terms of, this Agreement, (2) for any Losses other than arising out of a
negligent performance by the Trustee of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
138
ARTICLE X
TERMINATION
SECTION 10.01. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Depositor and the Trustee created hereby (other than the obligation of the
Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon notice to the Trustee upon the
earliest of (i) the Distribution Date on which the Certificate Principal
Balances of the Regular Certificates have been reduced to zero, (ii) the final
payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the
optional purchase by the Terminator (as defined below) of the Mortgage Loans as
described below and (iv) the Distribution Date in November 2032. 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
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court of St.
James's, living on the date hereof.
The majority Holder of the Class C Certificates (unless such Holder
is the Seller, Greenwich Capital Markets, Inc. or an Affiliate of either of
them), or if such Holder (x) fails to exercise such option or (y) is the Seller,
Greenwich Capital Markets, Inc. or an Affiliate of either of them, the Servicer
(with the written consent of the Depositor or an Affiliate thereof, such consent
not to be unreasonably withheld) (either such Holder or the Servicer, as
applicable, the "Terminator"), may, at its option, terminate this Agreement on
any date on which the aggregate of the Principal Balances of the Mortgage Loans
(after giving effect to scheduled payments of principal received during the
related Due Period and unscheduled collections of principal received during the
related Prepayment Period) on such date is equal to or less than 10% of the
aggregate Principal Balances of the Original Mortgage Loans on the Cut-off Date,
by purchasing, on the next succeeding Distribution Date, all of the outstanding
Mortgage Loans and REO Properties at a price equal to the greater of (i) the
Principal Balance of the Mortgage Loans and the appraised value of any REO
Properties, such appraisal to be conducted by an Independent appraiser mutually
agreed upon by the Terminator and the Trustee in their reasonable discretion and
(ii) the fair market value of the Mortgage Loans and the REO Properties (as
determined by the Terminator and, to the extent that the Class A Certificates or
a Class of Mezzanine Certificates will not receive all amounts owed to it as a
result of the termination, the Trustee, as of the close of business on the third
Business Day next preceding the date upon which notice of any such termination
is furnished to the related Certificateholders pursuant to Section 10.01(c)), in
each case plus accrued and unpaid interest thereon at the weighted average of
the Mortgage Rates through the end of the Due Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances, any unpaid
Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued
and unpaid Net WAC Rate Carryover Amount (the "Termination Price"); provided,
however, such option may only be exercised if the Termination Price is
sufficient to pay all interest accrued on, as well as amounts necessary to
retire the principal balance of, each class of notes issued pursuant to an
Indenture between First Xxxxxxxx XXX Trust 2003-FFC as issuer and the Trustee as
indenture trustee.
139
In connection with any such purchase pursuant to the preceding
paragraph, the Terminator shall deposit in the Distribution Account all amounts
then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Terminator,
by letter to the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution specifying (1) the Distribution Date upon which final distribution
of the Certificates will be made upon presentation and surrender of such
Certificates at the office or agency of the Trustee therein designated, (2) the
amount of any such final distribution and (3) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Residual Certificates, the Holders of
the Residual Certificates agree, in connection with any termination hereunder,
to assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final 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 distribution
with respect thereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Residual
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto, and the Trustee upon transfer of such funds shall
be discharged of any responsibility for such funds, and the Certificateholders
shall look to the Residual Certificateholders for payment.
SECTION 10.02. Additional Termination Requirements.
(a) In the event that the Terminator exercises its purchase option
as provided in Section 10.01, each REMIC shall be terminated in accordance with
the following additional
140
requirements, unless the Trustee shall have been furnished with an Opinion of
Counsel to the effect that the failure of the Trust to comply with the
requirements of this Section will not (i) result in the imposition of taxes on
"prohibited transactions" of the Trust as defined in Section 860F of the Code or
(ii) cause any REMIC constituting part of the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Terminator shall adopt and the Trustee shall sign a plan of complete
liquidation of each REMIC created hereunder meeting the requirements of a
"Qualified Liquidation" under Section 860F of the Code and any regulations
thereunder; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust Fund to the Terminator for cash
pursuant to the terms of the plan of complete liquidation.
(b) By their acceptance of Certificates, the Holders thereof hereby agree
to appoint the Trustee as their attorney in fact to: (i) adopt such a plan of
complete liquidation (and the Certificateholders hereby appoint the Trustee as
their attorney in fact to sign such plan) as appropriate and (ii) to take such
other action in connection therewith as may be reasonably required to carry out
such plan of complete liquidation all in accordance with the terms hereof.
141
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
This Agreement may be amended from time to time by the Depositor,
the Servicer and the Trustee; without the consent of the Certificateholders (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be defective or inconsistent with any other provisions herein, (iii) to
amend the provisions of Section 3.22(b) or (iv) to make any other provisions
with respect to matters or questions arising under this Agreement or the Policy
which shall not be inconsistent with the provisions of this Agreement; provided
that such action shall not, as evidenced by either (a) an Opinion of Counsel
delivered to the Trustee or (b) written notice to the Depositor, the Servicer
and the Trustee from 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, adversely affect in any material
respect the interests of any Certificateholder. No amendment shall be deemed to
adversely affect in any material respect the interests of any Certificateholder
who shall have consented thereto, and no Opinion of Counsel or Rating Agency
confirmation shall be required to address the effect of any such amendment on
any such consenting Certificateholder. Notwithstanding the foregoing, neither an
Opinion of Counsel or written notice to the Depositor, the Servicer and the
Trustee from the Rating Agencies will be required in connection with an
amendment to the provisions of Section 3.22(b).
In addition, this Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by either
(i) an Opinion of Counsel delivered to the Trustee or (ii) written notice to the
Depositor, the Servicer and the Trustee from 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)
in a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on any REMIC created hereunder constituting
part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC
created
142
hereunder constituting part of the Trust to fail to qualify as a REMIC at any
time that any Certificates are outstanding and that the amendment is being made
in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Servicer
and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
SECTION 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Trust, but only upon direction of the
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
143
members of an association; nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
SECTION 11.05. Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, by facsimile or by express delivery
service, to (a) in the case of the Servicer, 00000 Xxxxxx Xxxxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Ducks, with a copy to 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel, or such other
address or telecopy number as may hereafter be furnished to the Trustee and the
Depositor in writing by the Servicer, (b) in the case of the Trustee, Xxxxx
Fargo Bank Minnesota, National Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx
00000, Attention: First Franklin Mortgage Loan Trust Series 2003-FFC, with a
copy to
144
Xxxxx Fargo Bank Minnesota, National Association, 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: First Franklin Mortgage Loan Trust Series
2003-FFC, with a copy to Xxxxx Fargo Bank Minnesota, National Association, MAC N
9303-121, Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: First
Franklin Series 2003-FFC, or such other address or telecopy number as may
hereafter be furnished to the Depositor and the Servicer in writing by the
Trustee and (c) in the case of the Depositor, Financial Asset Securities Corp.,
000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such
other address or telecopy number as may be furnished to the Servicer and the
Trustee in writing by the Depositor. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Servicer Default shall be given by telecopy and by certified mail.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
SECTION 11.08. Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Servicer or the Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
145
(vi) if the Trustee is acting as successor Servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(b) In addition, the Trustee shall promptly make available to each
Rating Agency copies of each Statement to Certificateholders described in
Sections 4.03 and 3.19 hereof and the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(i) each annual statement as to compliance described in Section 3.20
hereof;
(ii) each annual independent public accountants' servicing report
described in Section 3.21 hereof; and
(iii) each notice delivered pursuant to Section 7.01(a) hereof which
relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing
and shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii)
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Residential Mortgage
Surveillance Group.
SECTION 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
SECTION 11.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing, and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
146
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.
147
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, all as of the day and year first above written.
FINANCIAL ASSET SECURITIES CORP.,
as Depositor
By: /s/ Xxxxx Xxxxx
--------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
CHASE MANHATTAN MORTGAGE CORPORATION,
as Servicer
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION., as Trustee
By: /s/ Xxx Xxxxx
--------------------------------------
Name: Xxx Xxxxx
Title: Vice President
148
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of June, 2003 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
______________ of Financial Asset Securities Corp., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________
Notary Public
149
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of June, 2003 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
_______________ of Chase Manhattan Mortgage Corporation, a corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________
Notary Public
150
STATE OF )
) ss.:
COUNTY OF )
On the ___th day of June, 2003 before me, a notary public in and for
said State, personally appeared __________________, known to me to be an
_____________________ of Xxxxx Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said association, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________________
Notary Public
151
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $85,376,000.00
Original Class Certificate
Principal Balance of this Class : $85,376,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CM 1
Class : A-1
Assumed Maturity Date : November 25, 2032
A-1-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class A-1
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien fixed-rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-1 Certificate (obtained by dividing the
Denomination of this Class A-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation, as servicer (the "Servicer"),
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class A-1 Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class A-1
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class A-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class A-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-1-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class A-1 Certificate]
FIRST FRANKLIN MORTGAGE LOAN TRUST 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-1-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
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.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $70,656,000.00
Original Class Certificate
Principal Balance of this Class : $70,656,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CN 9
Class : A-2
Assumed Maturity Date : November 25, 2032
A-2-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class A-2
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien fixed-rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class A-2 Certificate (obtained by dividing the
Denomination of this Class A-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation, as servicer (the "Servicer"),
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class A-2 Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class A-2
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class A-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class A-2 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-2-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class A-2 Certificate]
FIRST FRANKLIN MORTGAGE LOAN TRUST 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-2-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-2-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-2-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________________, or, if mailed by check, to _______________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS S CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Notional Amount of this
Certificate ("Denomination")
: $39,130,000.00
Original Notional Amount of this
Class : $ 39,130,000.00
Percentage Interest : 100.00%
Pass-Through Rate : 6.00% per annum
CUSIP : 32027N CT 6
Class : S
Assumed Maturity Date : December 25, 2005
A-3-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class S
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien fixed-rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Class S Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class S Certificate (obtained by dividing the
Denomination of this Class S Certificate by the Original 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 June 1, 2003 (the "Agreement") among the Depositor, Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Xxxxx Fargo
Bank Minnesota, National Association, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class S Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class S Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class S
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class S Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By: ____________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By ________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class S Certificate]
FIRST FRANKLIN MORTGAGE LOAN TRUST 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (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 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 Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-3-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Trustee, the Certificate Registrar, any
Paying Agent and any agent of the Servicer, the Depositor, the Trustee, 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
hereof for all purposes, and none of the Servicer, the Trust, the Trustee nor
any agent of any of them shall be affected by notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in December 2005.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-3-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated: ________________
________________________________________
Signature by or on behalf of assignor
A-3-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number _____________________, or, if mailed by check, to _______________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-1 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES AND THE CLASS THE
CLASS S CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $21,522,000.00
Original Class Certificate
Principal Balance of this Class : $21,522,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CP 4
Class : M-1
Assumed Maturity Date : November 25, 2032
A-4-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
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 second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-1 Certificate (obtained by dividing the
Denomination of this Class M-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation Corp., as servicer (the
"Servicer"), and Xxxxx Fargo Bank Minnesota, National Association, a national
banking association, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Class M-1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class M-1 Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-4-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class M-1 Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-4-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-4-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________________
Signature by or on behalf of assignor
A-4-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
for the account of _____________________________________________________________
account number __________________, or, if mailed by check, to __________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-2 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $9,783,000.00
Original Class Certificate
Principal Balance of this Class : $9,783,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CQ 2
Class : M-2
Assumed Maturity Date : November 25, 2032
A-5-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class M-2
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-2 Certificate (obtained by dividing the
Denomination of this Class M-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation, as servicer (the "Servicer"),
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class M-2 Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class M-2
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-5-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By____________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class M-2 Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-5-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-5-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-5-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ______________, or, if mailed by check, _________________________
________________________________________________________________________________
to Applicable statements should be mailed to ___________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-3 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $5,380,000.00
Original Class Certificate
Principal Balance of this Class : $5,380,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CR 0
Class : M-3
Assumed Maturity Date : November 25, 2032
A-6-
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class M-3
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-3
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-3 Certificate (obtained by dividing the
Denomination of this Class M-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation, as servicer (the "Servicer"),
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class M-3 Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class M-3
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-6-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By____________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class M-3 Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
A-6-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office of the Trustee
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-6-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-6-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________, or, if mailed by check, to ___________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS M-4 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATE AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $2,446,000.00
Original Class Certificate
Principal Balance of this Class : $2,446,000.00
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : 32027N CS 8
Class : M-4
Assumed Maturity Date : November 25, 2032
A-7-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class M-4
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-4
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Class M-4 Certificate (obtained by dividing the
Denomination of this Class M-4 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Financial Asset
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of June 1, 2003 (the "Agreement") among the
Depositor, Chase Manhattan Mortgage Corporation, as servicer (the "Servicer"),
and Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Class M-4 Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class M-4
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-4 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-7-2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By____________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
A-7-3
[Reverse of Class M-4 Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-7-4
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-7-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-7-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS C CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A CERTIFICATES, THE CLASS S
CERTIFICATES AND THE MEZZANINE CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $493,489.93
Original Class Certificate
Principal Balance of this Class : $493,489.93
Percentage Interest : 100.00%
Class : C
A-8-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class C
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that [_________________] is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the Denomination of this Class C Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Financial Asset Securities Corp.
(the "Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of June 1, 2003 (the "Agreement") among the Depositor, Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Xxxxx Fargo
Bank Minnesota, National Association, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class C Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class C Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-8-2
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-8-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class C Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-8-5
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November, 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-8-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-8-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ___________________, or, if mailed by check, to _________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS P CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $100.00
Original Class Certificate
Principal Balance of this Class : $100.00
Percentage Interest : 100.00%
Class : P
A-9-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class P
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of second lien adjustable rate and fixed rate mortgage loans
(the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, or the Trustee referred to below or
any of their respective affiliates.
This certifies that [___________________] is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Financial Asset Securities Corp.
(the "Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of June 1, 2003 (the "Agreement") among the Depositor, Chase
Manhattan Mortgage Corporation, as servicer (the "Servicer"), and Xxxxx Fargo
Bank Minnesota, National Association, a national banking association, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class P Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class P Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a pass-through rate and will be entitled to
distributions only to the extent set forth in the Agreement.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability
A-9-2
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-9-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class P Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-9-5
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-9-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address: ______________________________________________________
________________________________________________________________________________
Dated:_________________
________________________________________
Signature by or on behalf of assignor
A-9-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _____________, or, if mailed by check, to _______________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-9-8
EXHIBIT A-10
FORM OF CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Percentage Interest : 100.00%
Class : R
A-10-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class R
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting primarily of a pool of second lien adjustable rate and fixed
rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that ______________________ is the registered owner of the
Percentage Interest evidenced by this Certificate specified above in the
interest represented by all Certificates of the Class to which this Certificate
belongs in a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of July 1, 2003 (the
"Agreement") among the Depositor, Chase Manhattan Mortgage Corporation, as
servicer (the "Servicer"), and Xxxxx Fargo Bank Minnesota, National Association,
a national banking association, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-10-2
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
officer of the Trustee.
A-10-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class R Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-10-5
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-10-6
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-10-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-10-8
EXHIBIT A-11
FORM OF CLASS X CERTIFICATES
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Percentage Interest : 100.00%
Class : X
A-11-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class X Certificate
evidencing the Percentage Interest in the distributions allocable to the
Certificates with respect to the Trust consisting of second lien
adjustable-rate and fixed-rate 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 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 in certain
distributions with respect to a Trust consisting primarily of the Mortgage Loans
deposited by Financial Asset Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of June 1, 2003
(the "Agreement") among the Depositor, Chase Manhattan Mortgage Corporation., as
servicer (the "Servicer"), and Xxxxx Fargo Bank Minnesota, National Association,
a national banking association, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class 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.
No transfer of this Class X Certificate shall be made unless such transfer
is made pursuant to an effective registration statement under the Act and any
applicable state securities laws or is exempt from the registration requirements
under said Act and such laws. In the event that a transfer is to be made in
reliance upon an exemption from the Act and such laws, in order to assure
compliance with the Act and such laws, the Certificateholder desiring to effect
such transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee and the Depositor in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Depositor of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
A-11-2
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.
A-11-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By: _____________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class X Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of the Class X Certificates on such Distribution Date
pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-11-5
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-11-6
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-11-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________, or, if mailed by check, to ___________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-11-8
EXHIBIT A-12
FORM OF CLASS R-X CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : June 1, 2003
First Distribution Date : July 25, 2003
Percentage Interest : 100.00%
Class : R
A-12-1
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
Class R-X
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting primarily of a pool of second lien adjustable rate and fixed
rate mortgage loans (the "Mortgage Loans")
FINANCIAL ASSET SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that ______________________ is the registered owner of the
Percentage Interest evidenced by this Certificate specified above in the
interest represented by all Certificates of the Class to which this Certificate
belongs in a Trust consisting primarily of the Mortgage Loans deposited by
Financial Asset Securities Corp. (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of July 1, 2003 (the
"Agreement") among the Depositor, Chase Manhattan Mortgage Corporation, as
servicer (the "Servicer"), and Xxxxx Fargo Bank Minnesota, National Association,
a national banking association, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in Minneapolis, Minnesota.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
of an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee, the Servicer or the Depositor; or there shall be delivered to the
Trustee and the Depositor a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
A-12-2
No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, The Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R-X
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
officer of the Trustee.
A-12-3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: June __, 2003
FIRST FRANKLIN MORTGAGE LOAN TRUST
2003-FFC
By: XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee
By_______________________________________
This is one of the Certificates
referenced in the within-mentioned Agreement
By__________________________________________
Authorized Signatory of
Xxxxx Fargo Bank Minnesota, National Association,
as Trustee
[Reverse of Class R-X Certificate]
First Franklin Mortgage Loan Trust 2003-FFC
Asset-Backed Certificates,
Series 2003-FFC
This Certificate is one of a duly authorized issue of Certificates
designated as First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed
Certificates, Series 2003-FFC (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, then the
Business Day immediately following such Distribution Date (the "Distribution
Date"), commencing on the first Distribution Date specified on the face hereof,
to the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee specified in the notice to
Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer and the Trustee and of Holders of the requisite
percentage of the Percentage Interests of each Class of Certificates affected by
such amendment, as specified in the Agreement. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender
A-12-5
of this Certificate for registration of transfer at the Corporate Trust Office
of the Trustee accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer and the Trustee and any agent of the
Depositor, the Servicer or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Trustee, the Servicer or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, the
Terminator may purchase, in whole, from the Trust the Mortgage Loans at a
purchase price determined as provided in the Agreement. In the event that no
such optional termination occurs, the obligations and responsibilities created
by the Agreement will terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balances of the
Regular Certificates have been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, (iii) the Distribution Date
in November 2032.
Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
A-12-6
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-12-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.
A-12-8
EXHIBIT B
FORM OF MORTGAGE POOL INSURANCE POLICY
B-1
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
C-1
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Seller
and
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of June 24, 2003
Fixed-Rate Mortgage Loans
First Franklin Mortgage Loan Trust 2003-FFC
Table of Contents
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions...................................................1
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans........................................2
Section 2.02 Obligations of the Seller Upon Sale...........................2
Section 2.03 Payment of Purchase Price for the Mortgage Loans..............4
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans................................................5
Section 3.02 Seller Representations and Warranties Relating to the
Seller.......................................................13
Section 3.03 Remedies for Breach of Representations and Warranties........15
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller......................................16
Section 5.01 Indemnification..............................................17
ARTICLE VI.
TERMINATION
Section 6.01 Termination..................................................20
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment....................................................20
Section 7.02 Governing Law................................................20
Section 7.03 Notices......................................................20
Section 7.05 Counterparts.................................................20
Section 7.06 Further Agreements...........................................20
Section 7.07 Intention of the Parties.....................................21
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.....21
Section 7.09 Survival.....................................................21
i
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of June 24, 2003 (the
"Agreement"), between Greenwich Capital Financial Products, Inc. (the "Seller")
and Financial Asset Securities Corp. (the "Purchaser").
WITNESSETH
WHEREAS, the Seller is the owner of (a) the notes or other evidence
of indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto
referred to below and (b) the other documents or instruments constituting the
Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of June 1, 2003 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Chase Manhattan Mortgage Corporation as servicer and
Xxxxx Fargo Bank Minnesota, National Association as trustee (the "Trustee"), the
Purchaser will convey the Mortgage Loans to First Franklin Mortgage Loan Trust
2003-FFC (the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
"Seller Information": The information in the Prospectus Supplement as
follows: under "SUMMARY OF TERMS--Mortgage Loans," "SUMMARY OF TERMS--The
Mortgage Pool Insurance Policy," the first sentence of the fifth bullet
point under "RISK FACTORS--Unpredictability of Prepayments and Effect on
Yields," "RISK FACTORS--Certain of the Mortgage Loans are Delinquent," the
third sentence under "RISK FACTORS--Balloon Loan Risk," the second
sentence under "RISK FACTORS--Recoveries on Certain Delinquent Mortgage
Loans are not Available to the Offered Certificates," the second sentence
under "RISK FACTORS--Certain of High Combined Loan-to-Value Ratios
Increase Risk of Loss," "THE MORTGAGE POOL," the first sentence of the
fifth paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS" and
"THE SELLER"
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans. The Seller, concurrently with the
execution and delivery of this Agreement, does hereby sell, assign, set over,
and otherwise convey to the Purchaser, without recourse, (i) all of its right,
title and interest in and to each Mortgage Loan, including the related Cut-off
Date Principal Balance, all interest accruing thereon on or after the Cut-off
Date and all collections in respect of interest and principal due after the
Cut-off Date; (ii) property which secured such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies in respect of the Mortgage Loans and (iv) all proceeds of
any of the foregoing.
Section 2.02 Obligations of the Seller Upon Sale . In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense on or prior to the Closing Date, (a) to cause its books and records to
indicate that the Mortgage Loans have been sold to the Purchaser pursuant to
this Agreement and (b) to deliver to the Purchaser and the Trustee a computer
file containing a true and complete list of all such Mortgage Loans specifying
for each such Mortgage Loan, as of the Cut-off Date, (i) its account number and
(ii) the Cut-off Date Principal Balance. Such file, which forms a part of
Exhibit D to the Pooling and Servicing Agreement, shall also be marked as
Schedule I to this Agreement and is hereby incorporated into and made a part of
this Agreement.
In connection with any conveyance by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Trustee, as assignee of
the Purchaser, on or before the Closing Date, the following documents or
instruments with respect to each Mortgage Loan:
(i) the original Mortgage Note, endorsed either (A) in blank, in
which case the Trustee shall cause the endorsement to be completed or (B)
in the following form: "Pay to the order of Xxxxx Fargo Bank Minnesota
National Association, as Trustee," or with respect to any lost Mortgage
Note, an original Lost Note Affidavit stating that the original mortgage
note was lost, misplaced or destroyed, together with a copy of the related
mortgage note; provided, however, that such substitutions of Lost Note
Affidavits for original Mortgage Notes may occur only with respect to
Mortgage Loans, the aggregate Cut-off Date Principal Balance of which is
less than or equal to 1.00% of the Pool Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted for recording but
has not been returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such Mortgage or power
of attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
2
(iii) an original Assignment, in form and substance acceptable for
recording. The Mortgage shall be assigned either (A) in blank, without
recourse or (B) to "Xxxxx Fargo Bank Minnesota, National Association, as
Trustee";
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance, substitution agreement or guarantee, if any.
The Seller hereby confirms to the Purchaser and the Trustee that it
has caused the appropriate entries to be made in its general accounting records
to indicate that such Mortgage Loans have been transferred to the Trustee and
constitute part of the Trust in accordance with the terms of the Pooling and
Servicing Agreement.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian, no
later than the Closing Date, of a copy of each such document certified by the
Originator in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.02(v) above. The Seller shall deliver or cause
to be delivered to the Trustee or the Custodian, the original or a copy of a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original or a certified copy
thereof to be delivered to the Trustee or the Custodian, promptly upon receipt
thereof. The 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 deliver such missing document to the
Purchaser. 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 pursuant to Section 2.03 of the Pooling and
Servicing Agreement.
The Seller shall cause the Assignments which were delivered in blank
to be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Seller shall be required to deliver such
3
assignments for recording within 180 days of the Closing Date. In the event that
any such Assignment is lost or returned unrecorded because of a defect therein,
the Seller shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.
Notwithstanding the foregoing, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments of
Mortgage shall not be required to be submitted for recording (except with
respect to any Mortgage Loan located in Maryland) unless such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided, however, each Assignment shall be
submitted for recording by the Seller in the manner described above, at no
expense to the Trust Fund or Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a Servicer Event of Termination, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Servicer,
(iv) the occurrence of a servicing transfer as described in Section 7.02 of the
Pooling and Servicing Agreement, (v) upon receipt of notice from the Servicer,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage and (vi) upon receipt of notice from the
Servicer, any Mortgage Loan that is 90 days or more Delinquent. Upon receipt of
written notice from the Purchaser that recording of the Assignments is required
pursuant to one or more of the conditions set forth in the preceding sentence,
the Seller shall be required to deliver such Assignments for recording as
provided above, promptly and in any event within 30 days following receipt of
such notice. The Seller shall furnish the Trustee, or its designated agent, with
a copy of each Assignment submitted for recording.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date, the Trustee, at the expense
of the Seller, shall cause to be completed such endorsements "Pay to the order
of Xxxxx Fargo Bank Minnesota, National Association, as Trustee, without
recourse."
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law.
Section 2.03 Payment of Purchase Price for the Mortgage Loans.
In consideration of the sale of the Mortgage Loans from the Seller
to the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller
on the Closing Date (the "Purchase Price") by transfer of (i) immediately
available funds in an amount equal to the net sale proceeds of
4
the Class A Certificates, the Mezzanine Certificates and the Class S
Certificates and (ii) the Class C Certificates, the Class P Certificates, the
Class X Certificates and the Class R Certificates (collectively the "Retained
Certificates") which Retained Certificates shall be registered in the name of
Greenwich Capital Financial Products, Inc. or its designee. The Seller shall
pay, and be billed directly for, all expenses incurred by the Purchaser in
connection with the issuance of the Certificates, including, without limitation,
printing fees incurred in connection with the prospectus relating to the
Certificates, blue sky registration fees and expenses, fees and expenses of
Purchaser's counsel, fees of the rating agencies requested to rate the
Certificates, accountant's fees and expenses and the fees and expenses of the
Trustee and other out-of-pocket costs, if any.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans.
The Seller and the Purchaser understand, acknowledge and agree that,
the representations and warranties set forth in this Section 3.01 are made as of
the Closing Date or as of the date specifically provided herein.
The Seller hereby represents and warrants with respect to the
Mortgage Loans to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:
(a) The information set forth in the mortgage loan schedule
delivered to the Seller by the Originator is complete, true and correct as of
the Cut-off Date;
(b) Except with respect to 1.80% of the Group I Mortgage Loans and
1.65% of the Group II Mortgage Loans which were 30 or more days delinquent as of
May 31, 2003, none of the Mortgage Loans were delinquent in their monthly
payments as of May 31, 2003; the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of May 31, 2003 funds from a party
other than the owner of the related Mortgaged Property, directly or indirectly,
for the payment of any amount required by the Mortgage Note or Mortgage;
(c) At the time of origination, and to the best of the Seller's
knowledge, there were no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, including
assessments payable in future installments or other outstanding charges
affecting the related Mortgaged Property;
(d) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Purchaser or its designee; the substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the related policy, and is reflected on the Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the insurer under the title insurer, to the
extent required by
5
the policy, and which assumption agreement has been delivered to the Purchaser
or its designee and the terms of which are reflected in the Mortgage Loan
Schedule;
(e) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(f) All buildings upon the Mortgaged Property are insured by an
insurer that satisfies the requirements of First Franklin Financial
Corporation's ( the "Originator") underwriting guidelines against loss by fire,
hazards of extended coverage and such other hazards as are customary in the area
where the Mortgaged Property is located, in an amount that is at least equal to
the lesser of (i) the amount necessary to fully compensate for any damage or
loss to the improvements which are a part of such property on a replacement cost
basis or (ii) the sum of the outstanding principal balance of the Mortgage Loan
and the outstanding principal balance of the related first lien mortgage loan,
in each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer. All such
insurance policies contain a standard mortgagee clause naming the Originator,
its successors and assigns as mortgagee and all premiums thereon have been paid.
If the Mortgaged Property is in an area identified on a Flood Hazard Map or
Flood Insurance Rate Map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration is in effect which policy conforms to the
requirements of Xxxxxx Xxx and Xxxxxxx Mac. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(g) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing
or disclosure laws applicable to the origination and servicing of mortgage loans
of a type similar to the Mortgage Loans have been complied with;
(h) The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;
(i) The Mortgage is a valid, existing and enforceable second lien on
the Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (A) the lien of current real property taxes and assessments not
yet due and payable, (B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the originator
of the Mortgage Loan and which do not
6
adversely affect the Value of the Mortgaged Property, (C) a first lien on the
Mortgaged Property, and (D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, existing and enforceable second
lien and second priority security interest on the property described therein and
the Seller has full right to sell and assign the same;
(j) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms;
(k) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties. The Mortgagor is a natural person;
(l) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the Mortgagee
to advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(m) Prior to the sale of the Mortgage Loan by the Seller, the Seller
was the sole legal, beneficial and equitable owner of the Mortgage Note and the
Mortgage and had full right to transfer and sell the Mortgage Loan free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(n) All parties which had any interest in the Mortgage Loan, whether
as mortgagee, assignee, pledgee or otherwise, were (or, during the period in
which they held and disposed of such interest, were) in compliance with any and
all applicable "doing business" and licensing requirements of the laws of the
state wherein the Mortgaged Property is located.
(o) The Mortgage Loan was covered by an American Land Title
Association lender's title insurance policy which is acceptable to prudent
lenders, issued by a title insurer acceptable to prudent lenders and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring (subject to the exceptions contained in (i)(A), (B) and (C) above) the
Originator, its successors and assigns as to the second priority lien of the
Mortgage in the original principal amount of the Mortgage Loan. Additionally,
such lender's title insurance policy affirmatively insures ingress and egress to
and from the Mortgaged Property, and against encroachments by or upon the
Mortgaged Property or any interest therein. The Originator, its successors and
assigns, is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller,
7
has done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(p) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note (other than the delinquencies
mentioned in clause (b)) and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration, and the Seller has not
waived any default, breach, violation or event of acceleration. With respect to
each Mortgage Loan (i) the first lien mortgage loan is in full force and effect,
(ii) to the best of Seller's knowledge, there is no default, breach, violation
or event of acceleration existing under such first lien mortgage or the related
mortgage note, (iii) to the best of the Seller's knowledge, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the first lien mortgage contains a provision which
allows or (B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the first lien mortgage;
(q) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(r) All improvements that were considered in determining the Value
of the related Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on adjoining
properties encroached upon the Mortgaged Property. Each appraisal has been
performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;
(s) The Mortgage Loan was originated (for purposes of the Secondary
Mortgage Market Enhancement Act of 1984) by the Originator or by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of Housing and Urban
Development;
(t) Principal payments on the Mortgage Loan commenced no more than
two (2) months after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan bears interest at the Mortgage Rate. Except with respect to 0.19%
of the Group I Mortgage Loans and 0.10% of the Group II Mortgage Loans (in each
case, based on the aggregate Principal Balance of the related Loan Group as of
the Cut-off Date), the Mortgage Note is payable on the first day of each month.
Except with respect to each Balloon Mortgage Loan, the Mortgage Note is payable
in Monthly Payments which will fully amortize the Stated Principal Balance of
the Mortgage Loan over its remaining term at the Mortgage Rate. In the case of a
Balloon Mortgage Loan, the Mortgage Note is payable in Monthly Payments based on
a thirty (30) year amortization schedule and a final Monthly Payment
substantially greater than the preceding Monthly Payment which is sufficient to
fully amortize the remaining principal balance of the Balloon Mortgage Loan.
Interest on the
8
Mortgage Loan is calculated on the basis of a 360 day year consisting of twelve
30 day months. The Mortgage Note does not permit negative amortization;
(u) The origination, servicing and collection practices used by the
Originator and any servicer of the Mortgage Loan, with respect to each Mortgage
Note and Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing industry. The Mortgage Loan has been
serviced by the Originator and any predecessor servicer in accordance with the
terms of the Mortgage Note.;
(v) The Mortgaged Property is free of damage and waste and there is
no proceeding pending for the total or partial condemnation thereof;
(w) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (A) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (B) otherwise by
judicial foreclosure. With respect to the Mortgage Loans, when measured by
aggregate Principal Balance as of the Cut-off Date, no more than 14% of the
related Mortgaged Properties were subject to any bankruptcy proceeding or
foreclosure proceeding in the 36 month period preceding the origination date of
the Mortgage Loans. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the Soldiers
and Sailors Civil Relief Act of 1940;
(x) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Originator in effect at the time the Mortgage Loan
was originated; and the Mortgage Note and Mortgage are on customary forms
acceptable purchasers of mortgage loans as the same type as the Mortgage Loans
in the secondary market. No Mortgage Loan was underwritten in accordance with
the Originator's Direct Access Dividends Program guidelines;
(y) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (i) above;
(z) The Mortgage File contains an appraisal of the related Mortgaged
Property which satisfied the standards of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and the rules and regulations thereunder,
as amended from time to time, and was made and signed by an appraiser who met
the minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac or complied with the
Originator's automated appraisal methodology as set forth in the Originator's
underwriting guidelines, duly appointed by the Originator, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, and the rules and
regulations thereunder;
9
(aa) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(bb) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (A) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (B) paid by any source other than the Mortgagor or (C) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(cc) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of fixed-rate mortgage loans; and if the Mortgage Loan is
a Refinanced Mortgage Loan, the Mortgagor has received all disclosure and
rescission materials required by applicable law with respect to the making of a
refinanced Mortgage Loan, and evidence of such receipt is and will remain in the
Mortgage File;
(dd) No Mortgage Loan was made in connection with (A) the
construction or rehabilitation of a Mortgaged Property or (B) facilitating the
trade-in or exchange of a Mortgaged Property;
(ee) The Mortgage Note, the Mortgage, the Assignment and any other
documents required to be delivered with respect to each Mortgage Loan have been
delivered to the Seller;
(ff) The Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities;
(gg) To the best of the Seller's knowledge, no error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person, including, without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination, modification or amendment of the Mortgage
Loan or in the application of any insurance in relation to such Mortgage Loan;
(hh) The Assignment is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located;
(ii) Any principal advances made to the Mortgagor prior to the
Closing Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated bears
a single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having second
lien priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's
10
consolidated interest or by other title evidence acceptable to Xxxxxx Mae and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(jj) As of the Cut-off Date, no more than 95.33% of the Group I
Mortgage Loans and 95.74% of the Group II Mortgage Loans (in each case, based on
the aggregate Principal Balance of the related Loan Group as of the Cut-off
Date) had a balloon payment feature;
(kk) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development), such condominium or planned unit development
project meets Xxxxxx Mae's eligibility requirements;
(ll) The Mortgaged Property was in material compliance with all
applicable environmental laws pertaining to environmental hazards including,
without limitation, asbestos, and there is no pending action or proceeding
directly involving any Mortgaged Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is an issue; and to
the best of the Seller's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to the use and enjoyment of such property;
(mm) Reserved;
(nn) The Mortgage Loan was selected from among the outstanding
fixed-rate one to four family second lien mortgage loans in the Seller's
portfolio as which the representations and warranties herein could be made and
such selection was not made in a manner so as to adversely affect the interests
of the Purchaser;
(oo) The Seller has not dealt with any broker or agent or other
Person who might be entitled to a fee, commission or compensation in connection
with the transaction contemplated by this Agreement other than the Purchaser
except as the Seller has previously disclosed to the Purchaser in writing;
(pp) The Mortgaged Property consists of a parcel of real property of
not more than ten acres with a single family residence erected thereon, or a
two- to four-family dwelling, or an individual condominium unit in a low rise or
high rise condominium project, or an individual unit in a planned unit
development. The Mortgaged Property is improved with a Residential Dwelling.
Without limiting the foregoing, the Mortgaged Property does not consist of any
of the following property types: (a) co-operative units, (b) log homes, (c)
earthen homes, (d) underground homes, (e) mobile homes and (f) manufactured
homes (as defined in the Xxxxxx Mae Seller-Servicer's Guide), except when the
appraisal indicates that the home is of comparable construction to a stick or
beam construction home, is readily marketable, has been permanently affixed to
the site and is not in a mobile home "park." The Mortgaged Property is either a
fee simple estate or a long term residential lease. If the Mortgage Loan is
secured by a long term residential lease, unless otherwise specifically
disclosed in the related Mortgage Loan Schedule, (A) the terms of such lease
expressly permit the mortgaging of the leasehold estate, the assignment of the
lease without the lessor's consent (or the lessors consent has been obtained and
such consent is in the Mortgage File) and the acquisition by the holder of the
Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of
11
foreclosure or provide the holder of the Mortgage with substantially similar
protection; (B) the terms of such lease do not (x) allow the termination thereof
upon the lessee's default without the holder of the Mortgage being entitled to
receive written notice of, and opportunity to cure, such default or (y) prohibit
the holder of the Mortgage from being insured under the hazard insurance policy
relating to the Mortgaged Property, (C) the original term of such lease is not
less than 15 years; (D) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (E) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates for
residential properties is a widely accepted practice;
(qq) At the time of origination, the combined Loan-to-Value Ratio
(the "CLTV") of the Mortgage Loan was not greater than 100%. Except with respect
to 1.03% of the Group II Mortgage Loans (based on the aggregate Principal
Balance of the Group II Mortgage Loans as of the Cut-off Date), each of the
Mortgage Loans had a CLTV at the time of origination greater than 80%. With
respect to the Mortgage Loans, when measured by aggregate Stated Principal
Balance as of the Cut-off Date, with respect to no less than 80% of the Mortgage
Loans, the calculation of the CLTV at the time of origination was determined
based on a full formal appraisal acceptable to Xxxxxx Xxx and Xxxxxxx Mac or
complied with the Originator's automated appraisal methodology as set forth in
the Originator's underwriting guidelines;
(rr) The Mortgage, and if required by applicable law the related
Mortgage Note, contains a provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent of the
Mortgagee, at the option of the Mortgagee;
(ss) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA;
(tt) The information set forth in the Prepayment Charge Schedule is
complete, true and correct in all material respects as of the Cut-off Date, and
each Prepayment Charge is permissible, enforceable and collectible under
applicable state law;
(uu) As of the Cut-off Date, the Mortgage Loan was not prepaid in
full prior to the sale of the Mortgage Loans by the Seller, and the Seller had
not received any notification from a Mortgagor that a prepayment in full would
be made after the sale of the Mortgage Loans by the Seller;
(vv) The Mortgage Loan had an original term of maturity of not more
than 360 months;
(ww) 43.36% of the Group I Mortgage Loans and 69.95% of the Group II
Mortgage Loans (in each case, based on the aggregate Principal Balance of the
related Loan Group as of the Cut-off Date) are secured by Mortgaged Properties
located in the state of California;
(xx) Each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code;
12
(yy) No proceeds from any Group I Mortgage Loan were used to
purchase single premium credit insurance policies as part of the origination of,
or as a condition to closing such Group I Mortgage Loan;
(zz) No Mortgage Loan originated before October 1, 2002 has a
Prepayment Charge term longer than five years after its date of origination and
no Group I Mortgage Loan originated on or after October 1, 2002 has a Prepayment
Charge term longer than three years after its date of origination;
(aaa) No Group I Mortgage Loan was originated on or after October 1,
2002 and before March 7, 2003 which is secured by property located in the State
of Georgia. No Group I Mortgage Loan was originated on or after March 7, 2003,
which is a "high cost home loan" as defined under the Georgia Fair Lending Act;
(bbb) With respect to each Mortgage Loan, (i) if the related first
lien provides for negative amortization, the CLTV was calculated at the maximum
principal balance of such first lien that could result upon application of such
negative amortization feature, and (ii) either no consent for the Mortgage Loan
is required by the holder of the first lien or such consent has been obtained
and is contained in the Mortgage File;
(ccc) No Group I Mortgage Loan (a) is secured by property located in
the State of New York; (b) had a Principal Balance at origination of $300,000 or
less, and (c) has an application date on or after April 1, 2003, the terms of
which Group I Mortgage Loan equal or exceed either the APR or the points and
fees threshold for "high-cost home loans," as defined in Section 6-L of the New
York State Banking Law; and
(ddd) Each loan at the time it was made complied in all material
respects with applicable local, state, and federal laws, including, but not
limited to, all applicable predatory and abusive lending laws and none of the
mortgage loans are "High Cost" as defined by the applicable predatory and
abusive lending laws.
Section 3.02 Seller Representations and Warranties Relating to the Seller.
The Seller represents, warrants and covenants to the Purchaser as of the Closing
Date or as of such other date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;
(b) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser, constitutes
a legal,
13
valid and binding obligation of the Seller, enforceable against it in accordance
with its terns except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization;
(c) The execution and delivery of this Agreement by the Seller and
the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;
(d) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;
(e) Reserved;
(f) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof,
(g) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(h) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;
(i) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained;
(j) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans is in the ordinary
14
course of business of the Seller and the assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or any similar statutory provisions;
(k) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Mortgage Note and related Mortgage have not
been assigned or pledged and immediately prior to the transfer and assignment
herein contemplated, the Seller held good, marketable and indefeasible title to,
and was the sole owner and holder of, other than the related senior lien, each
Mortgage Loan subject to no liens, charges, mortgages, claims, participation
interests, equities, pledges or security interests of any nature, encumbrances
or rights of others (collectively, a "Lien"); the Seller has full right and
authority under all governmental and regulatory bodies having jurisdiction over
the Seller, subject to no interest or participation of, or agreement with, any
party, to sell and assign the same pursuant to this Agreement; and immediately
upon the transfers and assignments herein contemplated. the Seller shall have
transferred all of its right, title and interest in and to each Mortgage Loan
and the Trustee will hold good, marketable and indefeasible title to, and be the
sole owner of, each Mortgage Loan subject to no Liens.
(l) The Seller 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; and
(m) Except with respect to any statement regarding the intentions of
the Purchaser, or any other statement contained herein the truth or falsity of
which is dependant solely upon the actions of the Purchaser, this Agreement does
not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements contained herein not misleading. The
written statements, reports and other documents prepared and furnished or to be
prepared and furnished by the Seller pursuant to this Agreement or in connection
with the transactions contemplated hereby taken in the aggregate do not contain
any untrue statement of material fact or omit to state a material fact necessary
to make the statements contained therein not misleading.
Section 3.03 Remedies for Breach of Representations and Warranties. It is
understood and agreed that the representations and warranties set forth in
Subsections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Seller, or as to which the Seller has no knowledge,
if it is discovered that the substance of any such representation and warranty
is inaccurate and the inaccuracy materially and adversely affects the value of
the related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty being inaccurate at the time the representation and warranty was made,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty and the Seller shall take such action described in the following
paragraphs of this Section 3.03 in respect of such Mortgage Loan. Upon discovery
by either the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties that materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser (or which materially and
adversely affects the interests of the Purchaser in the related Mortgage Loan in
the case of a representation and warranty relating to a particular Mortgage
Loan), the party discovering such
15
breach shall give prompt written notice to the other. It is understood by the
parties hereto that a breach of the representations and warranties made in
Section 3.01(ss), (yy), (zz), (aaa) and (ccc) will be deemed to materially and
adversely affect the value of the related Mortgage Loan or the interest of the
Purchaser.
Within 120 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty made by the Seller that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest therein of the Purchaser, the Seller shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Purchase Price. In the event that a breach shall
involve any representation or warranty set forth in Subsection 3.02 and such
breach cannot be cured within 120 days of the earlier of either discovery by or
notice to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option be repurchased by the Seller at the Purchase Price. The
Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase a deficient Mortgage
Loan as provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If the Seller does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.03 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in accordance with Section 2.03
of the Pooling and Servicing Agreement. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.
Notwithstanding the foregoing, within 90 days of the earlier of
either discovery by or notice to the Seller of a breach of the representation of
the Seller set forth in Section 3.01(xx), the Seller shall repurchase such
Mortgage Loan at the Purchase Price or substitute a Qualified Substitute
Mortgage Loan for such Mortgage Loan, in each case, in accordance with the
provisions set forth above.
Notwithstanding the foregoing, within 90 days of the earlier of
discovery by the Seller or receipt of notice by the Seller of the breach of the
representation of the Seller set forth in Section 3.01(tt) above which
materially and adversely affects the interests of the Holders of the Class P
Certificates in any Prepayment Charge, the Seller shall pay the amount of the
scheduled Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account, net of any
amount previously collected by the Servicer and paid by the Servicer, for the
benefit of the Holders of the Class P Certificates, in respect of such
Prepayment Charge.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller and the delivery to the
Seller of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account. The Seller shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
16
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement. with the Mortgage Note endorsed as required
therein. The Seller shall remit for deposit in the Collection Account the
Monthly Payment due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution will be
retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Subsections 3.01 and 3.02.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive delivery of the respective
Mortgage Files to the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.03 to cure, repurchase and substitute for a defective
Mortgage Loan and the obligations of the Seller to indemnify the Purchaser as
provided in Section 5.01 constitute the sole remedies of the Purchaser
respecting a missing or defective document or a breach of the representations
and warranties contained in Section 3.01 or 3.02.
ARTICLE IV.
SELLERS COVENANTS
Section 4.01 Covenants of the Seller. The Seller hereby covenants that
except for the transfer hereunder, 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 (other than with respect
to the related senior lien for each Mortgage Loan); the Seller will notify the
Trustee, as assignee of the Purchaser, 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 Purchaser, 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 4.01 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.
17
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01 Indemnification.
(a) The Seller indemnifies and holds harmless the Purchaser, its
respective officers and directors and each person, if any, who controls the
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, as follows:
(i) against any and all losses, claims, expenses, damages or
liabilities, joint or several, to which the Purchaser or such controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof including,
but not limited to, any loss, claim, expense, damage or liability related to
purchases and sales of the Certificates) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement, or any amendment or supplement thereto, or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, to the extent that any untrue statement or alleged
untrue statement therein results (or is alleged to have resulted) from an error
or material omission in the information concerning the Seller Information
furnished by the Seller to the Purchaser for use in the preparation of the
Prospectus Supplement, which error was not superseded or corrected by the
delivery to the Purchaser of corrected written or electronic information, or for
which the Seller provided written notice of such error to the Purchaser prior to
the confirmation of the sale of the Certificates; and will reimburse the
Purchaser and each such controlling person for any legal or other expenses
reasonably incurred by the Purchaser or such controlling person in connection
with investigating or defending any such loss, claim, damage. liability or
action as such expenses are incurred;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, to the extent of the aggregate amount paid in settlement of
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Purchaser; and
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by the Purchaser), reasonably incurred
in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body. commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which
the Seller may otherwise have.
(b) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect
18
thereof is to be made against any indemnifying party under this Article V,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify an indemnifying party
shall not relieve it from any liability which it may have under this Article V
except to the extent it has been materially prejudiced by such failure and,
provided further, that the failure to notify any indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Article V for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its
19
objection to such settlement. No indemnifying party shall effect any settlement
of any pending or threatened proceeding in respect of which an indemnified party
is or could have been a party and indemnity is or could have been sought
hereunder, without the written consent of such indemnified party, unless
settlement includes an unconditional release of such indemnified party from all
liability and claims that are the subject matter of such proceeding.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each officer and director of the Purchaser and each person, if any, who controls
the Purchaser within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as the Purchaser and each director of the
Seller, each officer of the Seller, and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Seller.
(d) The Seller agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Seller to perform its duties in compliance with the terms of this Agreement or
(ii) arising from a breach by the Seller of its representations and warranties
in Sections 3.01 and 3.02 of this Agreement. The Seller shall immediately notify
the Purchaser, the Trustee and each Certificateholder if a claim is made by a
third party with respect to this Agreement. The Seller shall assume the defense
of any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against the Purchaser, the Trustee or any such
person or entity and/or any Certificateholder in respect of such claim.
20
ARTICLE VI.
TERMINATION
Section 6.01 Termination. The respective obligations and responsibilities
of the Seller and the Purchaser created hereby shall terminate, except for the
Seller's indemnity obligations as provided herein upon the termination of the
Trust as provided in Article X of the Pooling and Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Agreement may be amended from time to time by
the Seller and the Purchaser, by written agreement signed by the Seller and the
Purchaser.
Section 7.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows: (i) if to the Seller, Greenwich Capital Financial Products, Inc., 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such other
address as may hereafter be furnished to the Purchaser in writing by the Seller
and (iii) if to the Purchaser, Financial Asset Securities Corp., 000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Legal, or such other address as
may hereafter be furnished to the Seller in writing by the Purchaser.
Section 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05 Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 Further Agreements. The Purchaser and the Seller each agree
to execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or reasonable and appropriate to effectuate the
purposes of this Agreement or in connection with the issuance of any Series of
Certificates representing interests in the Mortgage Loans.
21
Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Seller
will cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in the Mortgage Loans. In that connection, the
Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 7.07 Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee.
The obligations of the Seller under this Agreement cannot be assigned or
delegated to a third party without the consent of the Purchaser which consent
shall be at the Purchaser's sole discretion, except that the Purchaser
acknowledges and agrees that the Seller may assign its obligations hereunder to
any Person into which the Seller is merged or any corporation resulting from any
merger, conversion or consolidation to which the Seller is a party or any Person
succeeding to the business of the Seller. The parties hereto acknowledge that
the Purchaser is acquiring the Mortgage Loans for the purpose of contributing
them to a trust that will issue a series of Certificates representing undivided
interests in such Mortgage Loans. As an inducement to the Purchaser to purchase
the Mortgage Loans, the Seller acknowledges and consents to the assignment by
the Purchaser to the Trustee of all of the Purchaser's rights against the Seller
pursuant to this Agreement insofar as such rights relate to Mortgage Loans
transferred to the Trustee and to the enforcement or exercise of any right or
remedy against the Seller pursuant to this Agreement by the Trustee. Such
enforcement of a right or remedy by the Trustee shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Purchaser
directly.
Section 7.09 Survival. The representations and warranties set forth in
Sections 3.01 and 3.02 and the provisions of Article V hereof shall survive the
purchase of the Mortgage Loans hereunder.
22
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year fist above written.
FINANCIAL ASSET SECURITIES CORP.,
as Purchaser
By:________________________________
Name:
Title:
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as Seller
By:_________________________________
Name:
Title:
SCHEDULE I
MORTGAGE LOANS
Available Upon Request
24
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Filed By Paper.
D-1
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank Minnesota, National Association
00 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement dated as of June 1, 2003 among
Financial Asset Securities Corp., as Depositor, Chase Manhattan
Mortgage Corporation, as Servicer and Xxxxx Fargo Bank Minnesota,
National Association, as Trustee
In connection with the administration of the Mortgage Loans held by you as
Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File Or the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_________1. Mortgage Paid in Full
_________2. Foreclosure
_________3. Substitution
_________4. Other Liquidation (Repurchases, etc.)
_________5. Nonliquidation Reason:_____________________
Address to which Trustee should deliver
the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________
E-1
By: _______________________________________
(authorized signer)
Issuer: ___________________________________
Address: __________________________________
__________________________________
Date: _____________________________________
Trustee
Xxxxx Fargo Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature
and date below:
____________________________ ____________________
Signature Date
Documents returned to Trustee:
____________________________ ____________________
Trustee Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[ DATE ]
Financial Asset Securities Corp. Chase Manhattan Mortgage Corporation
000 Xxxxxxxxx Xxxx 00000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000 Xxx Xxxxx, XX 00000]
Re: Pooling and Servicing Agreement, dated as of June 1, 2003, among
Financial Asset Securities Corp., Chase Manhattan Mortgage
Corporation and Xxxxx Fargo Bank Minnesota, National Association,
Asset-Backed Certificates, Series 2003-FFC
Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
The Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the Pooling and
Servicing Agreement. The Trustee makes no representations as to (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File includes any of the documents specified in clause (v) of Section
2.01 of the Pooling and Servicing Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
By: __________________________________
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
________________
[Date]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 1, 2003 among Financial Asset
Securities Corp., as Depositor, Chase Manhattan Mortgage
Corporation, as Servicer and Xxxxx Fargo Bank Minnesota, National
Association, as Trustee with respect to First Franklin Mortgage Loan
Trust 2003-FFC, Asset-Backed Certificates, Series 2003-FFC
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Trustee, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents listed above and has determined that each
such document appears to be complete and, based on an examination of such
documents, the information set forth in items 1 and 2 of the definition of
Mortgage Loan Schedule in the Pooling and Servicing Agreement accurately
reflects information in the Mortgage File.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: ________________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: First Franklin Mortgage Loan Trust 2003-FFC,
Asset-Backed Certificates Series 2003-FFC
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of June 1, 2003, among Financial Asset Securities Corp. as Depositor, Chase
Manhattan Mortgage Corporation as Servicer and Xxxxx Fargo Bank Minnesota,
National Association as Trustee (the "Trustee"), we hereby acknowledge the
receipt of the original Mortgage Notes or a Lost Note Affidavit with respect
thereto (a copy of which is attached hereto as Exhibit 1) with any exceptions
thereto listed on Exhibit 2.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: ____________________________________
Name:
Title:
F-3-1
EXHIBIT G
CHARGED OFF LOAN DATA REPORT
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 Xxxxx Fargo
Bank Minnesota, National Association, as trustee on behalf of First Franklin
Mortgage Loan Trust 2003-FFC, Asset-Backed Certificates Series 2003-FFC, to
accept the transfer of the above described loan from Seller.
Seller agrees to indemnify Xxxxx Fargo Bank Minnesota, National
Association, Financial Asset Securities Corp. and Chase Manhattan Mortgage
Corporation. harmless for any losses incurred by such parties resulting from the
above described promissory note has been lost or misplaced.
By: _______________________
_______________________
STATE OF )
) SS:
COUNTY OF )
On this ______ day of ______________, 20_, before me, a Notary Public, in
and for said County and State, appeared , who acknowledged the extension of the
foregoing and who, having been duly sworn, states that any representations
therein contained are true.
Witness my hand and Notarial Seal this _________ day of 20__.
_______________________
_______________________
My commission expires __________________________.
H-1
EXHIBIT I
FORM OF ANNUAL STATEMENT AS TO COMPLIANCE
First Franklin Mortgage Loan Trust, Series 2003-FFC
Asset Backed Pass-Through Certificates
I, _____________________, hereby certify that I am a duly appointed
__________________________ of Chase Manhattan Mortgage Corporation (the
"Servicer"), and further certify as follows:
1. This certification is being made pursuant to the terms of the
Pooling and Servicing Agreement, dated as of June 1, 2003, (the "Agreement"),
among Financial Asset Securities Corp., as depositor, Chase Manhattan Mortgage
Corporation, as servicer and Xxxxx Fargo Bank Minnesota, National Association,
as trustee.
2. I have reviewed the activities of the Servicer during the
preceding year and the Servicer's performance under the Agreement and to the
best of my knowledge, based on such review, the Servicer has fulfilled all of
its obligations under the Agreement throughout the year.
Capitalized terms not otherwise defined herein have the meanings set
forth in the Agreement.
Dated: _____________
I-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of _____________.
By: _____________________________
Name:
Title:
I, _________________________, a (an) __________________ of the
Servicer, hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the Master Servicer and that the signature
appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ______________.
By: _____________________________
Name:
Title:
I-2
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: First Franklin Mortgage Loan Trust 2003-FFC,
Asset-Backed Certificates Series 2003-FFC
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates, we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
J-1
Very truly yours,
[NAME OF TRANSFEREE]
By: ____________________________
Authorized Officer
J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Re: First Franklin Mortgage Loan Trust 2003-FFC,
Asset-Backed Certificates Series 2003-FFC
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended, or a plan that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor
are we acting on behalf of any such plan, (d) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
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:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_______________(1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
_____ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
_____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking and
is supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
_____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
_____ Broker-Dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
----------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
J-5
_____ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official
or agency of a State, territory or the District of Columbia.
_____ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
_____ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
_____ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
_____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958.
_____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors Act of
1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions
J-6
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Buyer is a bank or savings and loan is provided
above, the Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
____________________________________
Print Name of Buyer
By: ________________________________
Name:
Title:
Date: ______________________________
J-7
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
_____ The Buyer owned $_________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
_____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $___________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
J-8
5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
____________________________________
Print Name of Buyer or Adviser
By: ________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date: ______________________________
J-9
EXHIBIT K
AFFIDAVIT OF TRANSFER OF R CERTIFICATES
PURSUANT TO SECTION 5.02(d)
FIRST FRANKLIN MORTGAGE LOAN TRUST 2003-FFC
ASSET-BACKED CERTIFICATES, SERIES 2003-FFC
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Certificates, among Financial Asset Securities Corp., as
Depositor, Chase Manhattan Mortgage Corporation, as Servicer (the "Servicer")
and Xxxxx Fargo Bank Minnesota, National Association, as Trustee (the
"Trustee"). Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of the date of
the Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the same form as this affidavit. The Transferee has
no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) to
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass- through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person).
K-1
5. The Transferee has reviewed the provisions of Section 5.02(d) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person
to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit K to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701-(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of __________, ___.
[NAME OF TRANSFEREE]
By: ________________________
Name:
Title:
[Corporate Seal]
ATTEST:
__________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to
me to be the same person who executed the foregoing instrument and to be the of
the Transferee, and acknowledged that he executed the same as his free act and
deed and the free act and deed of the Transferee.
Subscribed and sworn before me this __ day of _______, ___.
________________________________________________
NOTARY PUBLIC
My Commission expires the ____ day of ____, ___.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: First Franklin Mortgage Loan Trust 2003-FFC,
Asset-Backed Certificates Series 2003-FFC
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.
Very truly yours,
TRANSFEROR
By: ___________________________
Name:
Title:
L-1
EXHIBIT M
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 20__
Chase Manhattan Mortgage Corporation Xxxxx Fargo Bank Minnesota, National
00000 Xxxxxx Xxxxxxxx Xxxx Association
Xxx Xxxxx, Xxxxxxxxxx 00000 0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Re: First Franklin Mortgage Loan Trust 2003-FFC,
Asset-Backed Certificates Series 2003-FFC
Dear Sirs:
_____________ (the "Transferee") intends to acquire from the
_______________________ ( "Transferor") $_________ Initial Certificate Principal
Balance First Franklin Mortgage Loan Trust 2003-FFC, Asset-Backed Certificates
Series 2003-FFC, Class [C][P][R] (the "Certificates"), issued pursuant to a
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as
of June 1, 2003 among Financial Asset Securities Corp. as depositor (the
"Depositor"), Chase Manhattan Mortgage Corporation as Servicer (the "Servicer")
and Xxxxx Fargo Bank Minnesota, National Association as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Servicer the following:
The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 X.X.X.xx.
2510.3-101.
Very truly yours,
[Transferee]
By:_____________________________
Name:
Title:
M-1
EXHIBIT N-1
FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Re: First Franklin Mortgage Loan Trust 2003-FFC Mortgage
Pass-Through Certificates, Series 2003-FFC
I, [identify the certifying individual], certify that:
l. I have reviewed this annual report on Form 10-K, and all reports
on Form 8-K containing distribution and servicing reports filed in respect of
periods included in the year covered by this annual report, of Financial Asset
Securities Corp. (the "Registrant");
2. Based on my knowledge, the information in these reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information and the
servicing information required to be provided to the Trustee by the Servicer
under the Pooling and Servicing Agreement is included in these reports;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed in
the report, the Servicer has fulfilled its obligations under the Pooling and
Servicing agreement; and
5. I have disclosed to the Registrant's certified public accountants
all significant deficiencies relating to the Servicer's compliance with the
minimum servicing standards in accordance with a review conducted in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or similar
standard as set forth in the Pooling and Servicing Agreement.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Chase
Manhattan Mortgage Corporation and Xxxxx Fargo Bank Minnesota, National
Association.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Pooling and Servicing Agreement"), among the Registrant as Depositor, Chase
Manhattan Mortgage Corporation as servicer and Xxxxx Fargo Bank Minnesota,
National Association as trustee.
FINANCIAL ASSET SECURITIES CORP.
By:____________________________________
Name:
Title:
Date:
EXHIBIT N-2
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: First Franklin Mortgage Loan Trust 2003-FFC (the "Trust")
Mortgage Pass-Through Certificates, Series 2003-FFC
I, [identify the certifying individual], a [title] of Xxxxx Fargo
Bank Minnesota, National Association, as Trustee of the Trust, hereby certify to
Financial Asset Securities Corp. (the "Depositor"), and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal
year [___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and
3. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Pooling and Servicing Agreement is included
in these reports.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Pooling and Servicing Agreement"), among the Depositor as depositor, Chase
Manhattan Mortgage Corporation, as servicer and Xxxxx Fargo Bank Minnesota,
National Association as trustee.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:__________________________________
Name:
Title:
Date:
EXHIBIT N-3
FORM CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE SERVICER
Re: First Franklin Mortgage Loan Trust 2003-FFC (the "Trust"),
Mortgage Pass-Through Certificates, Series 2003-FFC
I, [identify the certifying individual], certify that:
l. I have reviewed the information required to be provided to the
Trustee by the Servicer pursuant to the Pooling and Servicing Agreement (the
"Servicing Information");
2. Based on my knowledge, the Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the Servicing Information required to be
provided to the Trustee by the Servicer has been provided as required under the
Pooling and Servicing Agreement;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon my knowledge
and the annual compliance review required under the Pooling and Servicing
Agreement, and except as disclosed by written notice to the Trustee or in the
annual compliance statement or certified public accountant's report required to
be delivered to the Trustee in accordance with the terms of the Pooling and
Servicing Agreement (which has been so delivered to the Trustee), the Servicer
has, for the period covered by the Form 10-K Annual Report, fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The Servicer has disclosed to its certified public accountants
and the Depositor all significant deficiencies relating to the Servicer's
compliance with the minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar procedure, as set forth in the Pooling and Servicing
Agreement.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2003 (the
"Pooling and Servicing Agreement"), among the Depositor as depositor, Chase
Manhattan Mortgage Corporation as servicer and Xxxxx Fargo Bank Minnesota,
National Association as trustee.
CHASE MANHATTAN MORTGAGE
CORPORATION.
By:____________________________
Name:
Title:
Date:
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
(Available Upon Request)
SCHEDULE II
CLASS C MORTGAGE LOANS
