Exhibit 4.1
LONG BEACH SECURITIES CORP.,
Depositor
LONG BEACH MORTGAGE COMPANY,
Master Servicer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2004
------------------------------
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates, Series 2004-2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .......................................................................................6
Section 1.01 Defined Terms................................................................................6
Section 1.02 Accounting..................................................................................56
Section 1.03 Allocation of Certain Interest Shortfalls...................................................56
Section 1.04 Rights of the NIMS Insurer..................................................................57
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................................57
Section 2.01 Conveyance of Mortgage Loans................................................................57
Section 2.02 Acceptance of REMIC 1 by the Trustee........................................................61
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller; Remedies for Breaches by
Depositor or Master Servicer; Remedies for Breaches Relating to Prepayment Charges..........62
Section 2.04 Representations, Warranties and Covenants of the Master Servicer............................65
Section 2.05 Representations and Warranties of the Depositor.............................................67
Section 2.06 Issuance of Certificates....................................................................70
Section 2.07 Reserved....................................................................................70
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1 by the Trustee; Issuance of
Certificates................................................................................70
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...................................................71
Section 3.01 Master Servicer to Act as Master Servicer...................................................71
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers......................73
Section 3.03 Successor Sub-Servicers.....................................................................75
Section 3.04 Liability of the Master Servicer............................................................75
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS Insurer, the Trustee or
Certificateholders..........................................................................75
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trustee............................76
Section 3.07 Collection of Certain Mortgage Loan Payments................................................76
Section 3.08 Sub-Servicing Accounts......................................................................77
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing Accounts......................77
Section 3.10 Collection Account and Distribution Account.................................................78
Section 3.11 Withdrawals from the Collection Account and Distribution Account............................81
Section 3.12 Investment of Funds in the Collection Account and the Distribution Account..................83
Section 3.13 Reserved....................................................................................84
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage..............84
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements...................................85
Section 3.16 Realization Upon Defaulted Mortgage Loans...................................................86
Section 3.17 Trustee to Cooperate; Release of Mortgage Files.............................................89
i
Section 3.18 Servicing Compensation......................................................................90
Section 3.19 Reports to the Trustee; Collection Account Statements.......................................90
Section 3.20 Statement as to Compliance..................................................................91
Section 3.21 Independent Public Accountants' Servicing Report............................................91
Section 3.22 Access to Certain Documentation.............................................................92
Section 3.23 Title, Management and Disposition of REO Property...........................................92
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls.............95
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and Monthly Payments........95
Section 3.26 Reserve Fund................................................................................96
Section 3.27 Advance Facility............................................................................97
Section 3.28 Policy; Claims Under the PMI Policy.........................................................98
Section 3.29 Reserved....................................................................................99
Section 3.30 Cap Agreements..............................................................................99
ARTICLE IV FLOW OF FUNDS ......................................................................................99
Section 4.01 Distributions...............................................................................99
Section 4.02 Preference Claims..........................................................................110
Section 4.03 Statements.................................................................................111
Section 4.04 Remittance Reports; Advances...............................................................114
Section 4.05 Distributions on the REMIC Regular Interests...............................................116
Section 4.06 Allocation of Realized Losses..............................................................118
Section 4.07 Compliance with Withholding Requirements...................................................121
Section 4.08 Commission Reporting.......................................................................121
ARTICLE V THE CERTIFICATES .....................................................................................122
Section 5.01 The Certificates...........................................................................122
Section 5.02 Registration of Transfer and Exchange of Certificates......................................124
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..........................................129
Section 5.04 Persons Deemed Owners......................................................................129
ARTICLE VI THE MASTER SERVICER AND THE DEPOSITOR................................................................129
Section 6.01 Liability of the Master Servicer and the Depositor.........................................129
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer............................129
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others...................130
Section 6.04 Limitation on Resignation of Master Servicer...............................................131
Section 6.05 Rights of the Depositor, the NIMS Insurer and the Trustee in Respect of the Master Servicer.132
ARTICLE VII DEFAULT .....................................................................................133
Section 7.01 Master Servicer Events of Default..........................................................133
Section 7.02 Trustee to Act; Appointment of Successor...................................................135
Section 7.03 Notification to Certificateholders.........................................................137
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Section 7.04 Waiver of Master Servicer Events of Default................................................137
ARTICLE VIII THE TRUSTEE .....................................................................................138
Section 8.01 Duties of Trustee..........................................................................138
Section 8.02 Certain Matters Affecting the Trustee......................................................139
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans......................................140
Section 8.04 Trustee May Own Certificates...............................................................141
Section 8.05 Trustee's Fees and Expenses................................................................141
Section 8.06 Eligibility Requirements for Trustee.......................................................142
Section 8.07 Resignation or Removal of Trustee..........................................................142
Section 8.08 Successor Trustee..........................................................................143
Section 8.09 Merger or Consolidation of Trustee.........................................................143
Section 8.10 Appointment of Co-Trustee or Separate Trustee..............................................144
Section 8.11 Appointment of Custodians..................................................................145
Section 8.12 Appointment of Office or Agency............................................................145
Section 8.13 Representations and Warranties of the Trustee..............................................146
ARTICLE IX TERMINATION .....................................................................................146
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.............................146
Section 9.02 Additional Termination Requirements........................................................149
ARTICLE X REMIC PROVISIONS .....................................................................................149
Section 10.01 REMIC Administration.......................................................................149
Section 10.02 Prohibited Transactions and Activities.....................................................153
Section 10.03 Trustee, Master Servicer and Depositor Indemnification.....................................153
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................154
Section 11.01 Amendment..................................................................................154
Section 11.02 Recordation of Agreement; Counterparts.....................................................155
Section 11.03 Limitation on Rights of Certificateholders.................................................155
Section 11.04 Governing Law; Jurisdiction................................................................156
Section 11.05 Notices....................................................................................156
Section 11.06 Severability of Provisions.................................................................157
Section 11.07 Notice to the Rating Agencies and the NIMS Insurer.........................................157
Section 11.08 Article and Section References.............................................................158
Section 11.09 Third-Party Beneficiaries..................................................................158
Section 11.10 Grant of Security Interest.................................................................158
iii
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 A-3 Certificates
Exhibit A-4 Form of Class A-4 Certificates
Exhibit A-5 Form of Class M-1 Certificates
Exhibit A-6 Form of Class M-2 Certificates
Exhibit A-7 Form of Class M-3 Certificates
Exhibit A-8 Form of Class M-4 Certificates
Exhibit A-9 Form of Class M-5 Certificates
Exhibit A-10 Form of Class M-6 Certificates
Exhibit A-11 Form of Class M-7 Certificates
Exhibit A-12 Form of Class B Certificates
Exhibit A-13 Form of Class C Certificates
Exhibit A-14 Form of Class P Certificates
Exhibit A-15 Form of Class R Certificates
Exhibit A-16 Form of Class R-CX Certificates
Exhibit A-17 Form of Class R-PX Certificates
Exhibit B-1 Form of Class A-1 Cap Agreement
Exhibit B-2 Form of Class A-2/3/4 Cap Agreement
Exhibit B-3 Form of Subordinate Cap Agreement
Exhibit B-4 Form of Cap Agreement Assignment
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D Mortgage Loan Schedule
Exhibit E-1 Request for Release (for Trustee/Custodian)
Exhibit E-2 Request for Release
(Certificate - Mortgage Loan Paid in Full)
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit G Reserved
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J-1A Form of Class B Certificate Transferor Certificate
Exhibit J-1B Form of Class B Certificate Transferee Certificate
Exhibit J-2 Form of Investment Letter
Exhibit K Form of Class R Certificate, Class R-CX Certificate
and Class R-PX Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Schedules
Schedule I Prepayment Charge Schedule
Schedule II Reserved
Schedule III Reserved
Schedule IV PMI Mortgage Loan Schedule (Not applicable)
iv
This POOLING AND SERVICING AGREEMENT is dated as of May 1, 2004 (the
"Agreement"), among LONG BEACH SECURITIES CORP., as depositor (the "Depositor"),
LONG BEACH MORTGAGE COMPANY, as master servicer (the "Master Servicer") and
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of seventeen classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-4 Certificates,
(v) the Class M-1 Certificates, (vi) the Class M-2 Certificates, (vii) the Class
M-3 Certificates, (viii) the Class M-4 Certificates, (ix) the Class M-5
Certificates, (x) the Class M-6 Certificates, (xi) the Class M-7 Certificates,
(xii) the Class B Certificates, (xiii) the Class C Certificates, (xiv) the Class
P Certificates, (xv) the Class R Certificates, (xvi) the Class R-CX Certificates
and (xvii) the Class R-PX Certificates.
1
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (exclusive of the Reserve Fund and the
Master Servicer Prepayment Charge Payment Amounts) as a REMIC for federal income
tax purposes, and such segregated pool of assets will be designated as "REMIC
1." The Class R-1 Interest will represent the sole class of "residual interests"
in REMIC 1 for purposes of the REMIC Provisions (as defined herein) under
federal income tax law. The following table irrevocably sets forth the
designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular Interests
will be certificated.
Uncertificated
REMIC 1
Initial Uncertificated Pass-Through Assumed Final
Designation Principal Balance Rate Maturity Date(1)
-------------- ----------------------- ---------------- ------------------
LT1-AA $744,378,135.69 Variable(2) June, 2034
LT1-A1 $4,775,900.00 Variable(2) June, 2034
LT1-A2 $845,700.00 Variable(2) June, 2034
LT1-A3 $376,250.00 Variable(2) June, 2034
LT1-A4 $279,950.00 Variable(2) June, 2034
LT1-M1 $436,750.00 Variable(2) June, 2034
LT1-M2 $227,850.00 Variable(2) June, 2034
LT1-M3 $113,950.00 Variable(2) June, 2034
LT1-M4 $113,950.00 Variable(2) June, 2034
LT1-M5 $94,950.00 Variable(2) June, 2034
LT1-M6 $75,950.00 Variable(2) June, 2034
LT1-M7 $94,950.00 Variable(2) June, 2034
LT1-B $75,950.00 Variable(2) June, 2034
LT1-ZZ $7,679,290.52 Variable(2) June, 2034
LT1-1SUB $20,051.97 Variable(2) June, 2034
LT1-1GRP $115,569.97 Variable(2) June, 2034
LT1-2SUB $6,305.95 Variable(2) June, 2034
LT1-2GRP $36,343.95 Variable(2) June, 2034
LT1-XX $759,391,354.36 Variable(2) June, 2034
LT1-P $100.00 Variable(2) June, 2034
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC 1 Regular
Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
2
REMIC 2
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.
The following table 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 2 and each class of uncertificated "regular interests" in REMIC 2:
Original Class
Certificate Principal Pass-Through Assumed Final
Class Designation Balance Rate Maturity Date (1)
-------------------- ----------------------- ---------------- ------------------
A-1 $955,180,000.00 Variable(2) June, 2034
A-2 $169,140,000.00 Variable(2) June, 2034
A-3 $75,250,000.00 Variable(2) June, 2034
A-4 $55,990,000.00 Variable(2) June, 2034
M-1 $87,350,000.00 Variable(2) June, 2034
M-2 $45,570,000.00 Variable(2) June, 2034
M-3 $22,790,000.00 Variable(2) June, 2034
M-4 $22,790,000.00 Variable(2) June, 2034
M-5 $18,990,000.00 Variable(2) June, 2034
M-6 $15,190,000.00 Variable(2) June, 2034
M-7 $18,990,000.00 Variable(2) June, 2034
B $15,190,000.00 Variable(2) June, 2034
Class C Interest $16,719,152.43(3) Variable(2) June, 2034
Class P Interest $100.00 N/A(4) June, 2034
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of Certificates
or uncertificated interests that represents one or more of the "regular
interests" in REMIC 2.
(2) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(3) The Class C Interest will accrue interest at its variable
Pass-Through Rate on its Notional Amount outstanding from time to time, which
shall equal the aggregate of the Uncertificated Principal Balances of the REMIC
1 Regular Interests. The Class C Interest will not accrue interest on its
Uncertificated Principal Balance.
(4) The Class P Interest will not accrue interest.
3
REMIC CX
As provided herein, the Trustee will 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 CX." The Class R-CX Interest will represent the sole class
of "residual interests" in REMIC CX for purposes of the REMIC Provisions (as
defined herein) under federal income tax law. The following table irrevocably
sets forth the designation, the Pass-Through Rate, Original Class Certificate
Principal Balance, and solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
REMIC CX Regular Interests.
Uncertificated REMIC CX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date(1)
-------------------- ----------------------- ---------------- ------------------
Class C Variable(2) $16,719,152.43 June, 2034
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC CX Regular
Interest.
2 The Class C Certificates will not accrue interest on their Certificate
Principal Balance. Instead, the monthly interest due on the Class C Certificates
will be 100% of the interest paid on the Class C Interest.
4
REMIC PX
As provided herein, the Trustee will 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 PX." The Class R-PX Interest will represent the sole class
of "residual interests" in REMIC PX for purposes of the REMIC Provisions (as
defined herein) under federal income tax law. The following table irrevocably
sets forth the designation, the Pass-Through Rate, Original Class Certificate
Principal Balance, and solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the
REMIC PX Regular Interests.
Uncertificated REMIC PX Initial Uncertificated Assumed Final
Designation Pass-Through Rate Principal Balance Maturity Date1
-------------------- ----------------------- ---------------------- ------------------
Class P N/A2 $100.00 June, 2034
1 Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC PX Regular
Interest.
2 The Class P Certificates will not accrue interest.
5
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, the Mezzanine Certificates
and the Class B Certificates shall be made on the basis of the actual number of
days elapsed on the basis of a 360-day year and all other calculations of
interest described herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months. The Class P Certificates and the Residual
Certificates are not entitled to distributions in respect of interest and,
accordingly, will not accrue interest.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either of the Collection Account and Distribution Account.
"Accrual Period": With respect to the Class C Certificates, the REMIC 1 Regular
Interests and the Class C Interest, and each Distribution Date, the calendar
month prior to the month of such Distribution Date. With respect to the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates, and each
Distribution Date, the period commencing on the immediately preceding
Distribution Date (or in the case of the first such Accrual Period, commencing
on the Closing Date) and ending on the day immediately preceding such
Distribution Date.
"Adjustable Rate Mortgage Loan": A Mortgage Loan which provides for an
adjustable Mortgage Rate payable with respect thereto.
"Adjusted Net Maximum Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any Distribution Date, a per annum rate of interest
equal to the Maximum Mortgage Rate for such Mortgage Loan (if such Mortgage Loan
is an Adjustable Rate Mortgage Loan) or the Mortgage Rate for such Mortgage Loan
(if such Mortgage Loan is a Fixed Rate Mortgage Loan), in either such case as of
the first day of the month preceding the month in which such Distribution Date
occurs, minus the sum of (i) the Servicing Fee Rate, (ii) the PMI Insurer Fee
Rate, if applicable, and (iii) the Trustee Fee Rate.
"Adjusted Net Mortgage Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any Distribution Date, a per annum rate of interest equal
to the Mortgage Rate for such Mortgage Loan as of the first day of the month
preceding the month in which such Distribution Date occurs, minus the sum of (i)
the Servicing Fee Rate, (ii) the PMI Insurer Fee Rate, if applicable, and (iii)
the Trustee Fee Rate.
"Adjustment Date": With respect to each Adjustable Rate Mortgage Loan, each
date, on which the Mortgage Rate of such Mortgage Loan changes pursuant to the
related Mortgage Note. The first Adjustment Date following the Cut-off Date as
to each Adjustable Rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.
6
"Advance": As to any Mortgage Loan or REO Property, any advance made by the
Master Servicer in respect of any Distribution Date pursuant to Section 4.04.
"Advancing Person": As defined in Section 3.27 hereof.
"Adverse REMIC Event": As defined in Section 10.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.
"Allocated Realized Loss Amount": With respect to any Distribution Date and any
Class of the Mezzanine Certificates or the Class B Certificates, an amount equal
to (a) 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 less (b) any Allocated Realized Loss Amounts that
have been reinstated with respect to such Class of Certificates on prior
Distribution Dates due to Subsequent Recoveries.
"Assignment": An assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form (excepting therefrom, if applicable, the mortgage
recordation information which has not been required pursuant to Section 2.01
hereof or returned by the applicable recorder's office), which is sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect or record the sale of the Mortgage.
"Available Funds": With respect to any Distribution Date, an amount equal to the
excess of (i) the sum of (a) the aggregate of the Monthly Payments on the
Mortgage Loans due on the related Due Date and received on or prior to the
related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Principal Prepayments, Gross Subsequent Recoveries and other unscheduled
recoveries of principal and interest in respect of the Mortgage Loans during the
related Prepayment Period (other than any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount in
connection with Mortgage Loans), (c) the aggregate of any amounts received in
respect of an REO Property acquired in respect of a Mortgage Loan withdrawn from
any REO Account and deposited in the Collection Account for such Distribution
7
Date, (d) the aggregate of any amounts deposited in the Collection Account by
the Master Servicer in respect of related Prepayment Interest Shortfalls on the
Mortgage Loans for such Distribution Date, (e) the aggregate of any Advances
made by the Master Servicer or the Trustee for such Distribution Date with
respect to the Mortgage Loans, (f) the aggregate of any related advances made by
or on behalf of the Trustee for such Distribution Date with respect to the
Mortgage Loans pursuant to Section 7.02(b) and (g) the aggregate of any amounts
constituting proceeds of repurchases or substitutions of the Mortgage Loans
occurring during the related Prepayment Period over (ii) the sum, without
duplication, of (a) amounts reimbursable or payable to the Depositor, the Master
Servicer, the Trustee, the Seller, the NIMS Insurer or any Sub-Servicer pursuant
to Section 3.11 or Section 3.12 in respect of the Mortgage Loans or otherwise
payable in respect of Extraordinary Trust Fund Expenses, (b) amounts deposited
in the Collection Account or the Distribution Account pursuant to clauses (i)(a)
through (g) above, as the case may be, in error, (c) Stayed Funds, (d) any
Trustee Fee pursuant to Section 8.05 and any indemnification payments or expense
reimbursements made by the Trust Fund pursuant to Section 8.05 and (e) amounts
reimbursable to the Trustee for an advance made pursuant to Section 7.02(b)
which advance the Trustee has determined to be nonrecoverable from the Stayed
Funds in respect of which it was made.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the United
States Code), as amended.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Realized Loss resulting
from a Deficient Valuation or Debt Service Reduction.
"Book-Entry Certificates": Any of the Certificates that shall be registered in
the name of the Depository or its nominee, the ownership of which is reflected
on the books of the Depository or on the books of a Person maintaining an
account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
shall be Book-Entry Certificates.
"Book-Entry Custodian": The custodian appointed pursuant to Section 5.01(b).
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking or savings institutions in the State of California, the State of
Delaware, the State of New York, the State of Washington, 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 Agreements": The Class A-1 Cap Agreement, the Class A-2/3/4 Cap Agreement
and the Subordinate Cap Agreement.
"Cap Assignment": The Fixed Income Cap Assignment Agreement dated March 4, 2004
among the Cap Provider, the Seller, the Depositor and the Trustee.
"Cap Provider": Deutsche Bank AG, New York Branch.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Margin": With respect to the Class A-1 Certificates on each
Distribution Date (A) on or prior to the Optional Termination Date, 0.22% per
annum and (B) after the Optional Termination Date, 0.44% per annum. With respect
to the Class A-2 Certificates on each Distribution Date (A) on or prior to the
Optional Termination Date, 0.10% per annum and (B) after the Optional
Termination Date, 0.20% per annum. With respect to the Class A-3 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.23%
per annum and (B) after the Optional Termination Date, 0.46% per annum. With
8
respect to the Class A-4 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 0.50% per annum and (B) after the Optional
Termination Date, 1.00% per annum. With respect to the Class M-1 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 0.53%
per annum and (B) after the Optional Termination Date, 0.795% per annum. With
respect to the Class M-2 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 1.08% per annum and (B) after the Optional
Termination Date, 1.62% per annum. With respect to the Class M-3 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 1.15%
per annum and (B) after the Optional Termination Date, 1.725% per annum. With
respect to the Class M-4 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 1.40% per annum and (B) after the Optional
Termination Date, 2.10% per annum. With respect to the Class M-5 Certificates on
each Distribution Date (A) on or prior to the Optional Termination Date, 2.00%
per annum and (B) after the Optional Termination Date, 3.00% per annum. With
respect to the Class M-6 Certificates on each Distribution Date (A) on or prior
to the Optional Termination Date, 2.25% per annum and (B) after the Optional
Termination Date, 3.375% per annum. With respect to the Class M-7 Certificates
on each Distribution Date (A) on or prior to the Optional Termination Date,
3.50% per annum and (B) after the Optional Termination Date, 5.25% per annum.
With respect to the Class B Certificates on each Distribution Date (A) on or
prior to the Optional Termination Date, 3.50% per annum and (B) after the
Optional Termination Date, 5.25% per annum.
"Certificate Owner": With respect to each Book-Entry Certificate, any beneficial
owner thereof.
"Certificate Principal Balance": With respect to any Class A Certificates,
Mezzanine Certificates, Class B Certificates or Class P Certificates immediately
prior to any Distribution Date, an amount equal to the Initial Certificate
Principal Balance thereof reduced by the sum of all amounts actually distributed
in respect of principal of such Class and, in the case of a Mezzanine
Certificate or a Class B Certificate, Realized Losses allocated thereto on all
prior Distribution Dates and, in the case of a Mezzanine Certificate or a Class
B Certificate, increased by the Allocated Realized Loss Amounts reinstated
thereto on all prior Distribution Dates due to Subsequent Recoveries. With
respect to any Class C Certificates as of any date of determination, an amount
equal to the Uncertificated Principal Balance of the Class C Interest. The
Residual Certificates will not have a Certificate Principal Balance.
"Certificate Register": The register established and maintained pursuant to
Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or a Non-United States Person shall not be a Holder of a Residual Certificate
for any purposes hereof and, solely for the purposes of giving any consent,
direction or taking any other action pursuant to this Agreement, any Certificate
registered in the name of the Depositor or the Master Servicer or any Affiliate
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent, direction or
other action has been obtained, except as otherwise provided in Section 11.01.
The Trustee and the NIMS Insurer may conclusively rely upon a certificate of the
Depositor or the Master Servicer in determining whether a Certificate is held by
an Affiliate thereof. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise
such rights through the Depository and participating members thereof, except as
9
otherwise specified herein; provided, however, that the Trustee and the NIMS
Insurer shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
"Class": Collectively, Certificates which have the same priority of payment and
bear the same class designation and the form of which is identical except for
variation in the Percentage Interest evidenced thereby.
"Class A Certificates": The Class A-1, Certificates and the Group II Senior
Certificates.
"Class A Principal Distribution Amount": With respect to any Distribution Date,
the sum of the Group I Senior Principal Distribution Amount and the Group II
Senior Principal Distribution Amount.
"Class A-1 Cap Agreement": The interest rate cap agreement consisting of the
confirmation incorporating by reference the ISDA Master Agreement, dated April
20, 2004 between the Seller and the Cap Provider, as such agreement may be
amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
"Class A-1 Certificate": Any one of the Class A-1 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-1
executed, authenticated and delivered by the Trustee, representing the rights to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class A-2/3/4 Cap Agreement": The interest rate cap agreement consisting of the
confirmation incorporating by reference the ISDA Master Agreement, dated April
20, 2004 between the Seller and the Cap Provider, as such agreement may be
amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
"Class A-2 Certificate": Any one of the Class A-2 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-2
executed, authenticated and delivered by the Trustee, representing the rights to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class A-3 Certificate": Any one of the Class A-3 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-3
executed, authenticated and delivered by the Trustee, representing the rights to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class A-4 Certificate": Any one of the Class A-4 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-4
executed, authenticated and delivered by the Trustee, representing the rights to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
10
"Class B Certificate": Any one of the Class B Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit A-12 executed,
authenticated and delivered by the Trustee, representing the rights to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class B Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class B Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the aggregate Certificate Principal Balance of the Class
M-4 Certificates (after taking into account the payment of the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the aggregate
Certificate Principal Balance of the Class M-5 Certificates (after taking into
account the payment of the Class M-5 Principal Distribution Amount on such
Distribution Date), (vii) the aggregate Certificate Principal Balance of the
Class M-6 Certificates (after taking into account the payment of the Class M-6
Principal Distribution Amount on such Distribution Date), (viii) the aggregate
Certificate Principal Balance of the Class M-7 Certificates (after taking into
account the payment of the Class M-7 Principal Distribution Amount on such
Distribution Date) and (ix) the aggregate Certificate Principal Balance of the
Class B Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 97.80% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class C Certificate": Any one of the Class C Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit A-13, executed,
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC CX.
"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 2 for purposes of the REMIC Provisions.
"Class M-1 Certificate": Any one of the Class M-1 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-5,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
11
"Class M-1 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, an
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-1 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date) and (ii) the aggregate
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) 76.80% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-2 Certificate": Any one of the Class M-2 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-6,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class M-2 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date) and (iii) the aggregate 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) 82.80% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-3 Certificate": Any one of the Class M-3 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-7,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class M-3 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
12
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the aggregate
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) 85.80% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-4 Certificates": Any one of the Class M-4 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-8,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class M-4 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-4 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), and (v) the aggregate 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) 88.80% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-5 Certificates": Any one of the Class M-5 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-9,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
13
"Class M-5 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-5 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the aggregate Certificate Principal Balance of the Class
M-4 Certificates (after taking into account the payment of the Class M-4
Principal Distribution Amount on such Distribution Date) and (vi) the aggregate
Certificate Principal Balance of the Class M-5 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 91.30% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.
"Class M-6 Certificate": Any one of the Class M-6 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-10,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class M-6 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-6 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the aggregate Certificate Principal Balance of the Class
M-4 Certificates (after taking into account the payment of the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the aggregate
Certificate Principal Balance of the Class M-5 Certificates (after taking into
account the payment of the Class M-5 Principal Distribution Amount on such
Distribution Date) and (vii) the aggregate Certificate Principal Balance of the
Class M-6 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 93.30% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
14
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.
"Class M-7 Certificate": Any one of the Class M-7 Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A-11,
executed, authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC 2.
"Class M-7 Principal Distribution Amount": With respect to any Distribution Date
on or after the Stepdown Date and on which a Trigger Event is not in effect, the
amount equal to the lesser of (I) the aggregate Certificate Principal Balance of
the Class M-7 Certificates immediately prior to such Distribution Date and (II)
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the aggregate
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the aggregate Certificate Principal Balance of the
Class M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the aggregate Certificate Principal Balance of the Class
M-4 Certificates (after taking into account the payment of the Class M-4
Principal Distribution Amount on such Distribution Date), (vi) the aggregate
Certificate Principal Balance of the Class M-5 Certificates (after taking into
account the payment of the Class M-5 Principal Distribution Amount on such
Distribution Date), (vii) the aggregate Certificate Principal Balance of the
Class M-6 Certificates (after taking into account the payment of the Class M-6
Principal Distribution Amount on such Distribution Date) and (viii) the
aggregate Certificate Principal Balance of the Class M-7 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 95.80% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the
Overcollateralization Floor.
"Class P Certificate": Any one of the Class P Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit A-14, executed,
authenticated and delivered by the Trustee, representing the right to
distributions as set forth herein and therein and evidencing a regular interest
in REMIC PX.
"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 2 for purposes of the REMIC Provisions.
15
"Class R Certificate": Any one of the Class R Certificates as designated on the
face thereof substantially in the form annexed hereto as Exhibit A-15, executed,
authenticated and delivered by the Trustee, evidencing the ownership of the
Class R-1 Interest and the Class R-2 Interest.
"Class R-1 Interest": The Residual Interest in REMIC 1.
"Class R-2 Interest": The Residual Interest in REMIC 2.
"Class R-CX Certificate": Any one of the Class R-CX Certificates as designated
on the face thereof substantially in the form annexed hereto as Exhibit A-16,
executed, authenticated and delivered by the Trustee, evidencing the ownership
of the Class R-CX Interest.
"Class R-CX Interest": The Residual Interest in REMIC CX.
"Class R-PX Certificate": Any one of the Class R-PX Certificates as designated
on the face thereof substantially in the form annexed hereto as Exhibit A-17,
executed, authenticated and delivered by the Trustee, evidencing the ownership
of the Class R-PX Interest.
"Class R-PX Interest": The Residual Interest in REMIC PX.
"Close of Business": As used herein, with respect to any Business Day, 5:00 p.m.
(New York time).
"Closing Date": May 4, 2004.
"Closing Date Mortgage Loans": The Group I Closing Date Mortgage Loans and the
Group II Closing Date Mortgage Loans.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The account or accounts created and maintained by the
Master Servicer pursuant to Section 3.10(a), which shall be entitled "Deutsche
Bank National Trust Company, as Trustee, in trust for registered Holders of Long
Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates, Series 2004-2" and
which must be an Eligible Account.
"Commission": The Securities and Exchange Commission.
"Compensating Interest": As defined in Section 3.24.
"Corporate Trust Office": The principal corporate trust office of the Trustee at
which at any particular time its corporate trust business in connection with
this Agreement shall be administered, which office at the date of the execution
of this instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor and the Master
Servicer.
16
"Corresponding Certificates": With respect to (i) REMIC 1 Regular Interest
LT1-A1, (ii) REMIC 1 Regular Interest LT1-A2, (iii) REMIC 1 Regular Interest
LT1-A3, (iv) REMIC 1 Regular Interest LT1-A4, (v) REMIC 1 Regular Interest
LT1-M1, (vi) REMIC 1 Regular Interest LT1-M2, (vii) REMIC 1 Regular Interest
LT1-M3, (viii) REMIC 1 Regular Interest LT1-M4, (ix) REMIC 1 Regular Interest
LT1-M5, (x) REMIC 1 Regular Interest LT1-M6, (xi) REMIC 1 Regular Interest
LT1-M7, (xii) REMIC 1 Regular Interest LT1-B, (xiii) the Class C Interest and
(xiv) REMIC 1 Regular Interest LT1-P and the Class P Interest, (i) the Class A-1
Certificates, (ii) the Class A-2 Certificates, (iii) the Class A-3 Certificates,
(iv) the Class A-4 Certificates, (v) the Class M-1 Certificates, (vi) the Class
M-2 Certificates, (vii) the Class M-3 Certificates, (viii) the Class M-4
Certificates, (ix) the Class M-5 Certificates, (x) the Class M-6 Certificates,
(xi) the Class M-7 Certificates, (xii) the Class B Certificates, (xiii) the
Class C Certificates and (xiv) the Class P Certificates, respectively.
"Credit Enhancement Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the sum of
the aggregate Certificate Principal Balance of the Mezzanine Certificates, the
Class B Certificates and the Uncertificated Principal Balance of the Class C
Interest, calculated prior to distribution of the Group I Principal Distribution
Amount and the Group II Principal Distribution Amount in respect of the
Certificates then entitled to distributions of principal on such Distribution
Date, and the denominator of which is (y) the aggregate Stated Principal Balance
of the Mortgage Loans, calculated prior to taking into account payments of
principal on the Mortgage Loans due on the related Due Date or received during
the related Prepayment Period.
"Cumulative Loss Percentage": With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred (less any Subsequent Recoveries allocated to
the Certificate Principal Balance of any Certificate) from the Cut-off Date to
the last day of the calendar month preceding such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of the Cut-off Date.
"Cumulative Loss Trigger Event": A Cumulative Loss Trigger Event has occurred
with respect to any Distribution Date in or after June 2007, if the percentage
obtained by dividing (x) the aggregate amount of Realized Losses incurred (less
any Subsequent Recoveries) with respect to the Mortgage Loans from the Cut-off
Date through the last day of the related Due Period by (y) the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date, exceeds the
applicable percentage set forth below for such Distribution Date:
Distribution Date Occurring in Cumulative Loss Percentage
------------------------------- ----------------------------------------------------
June 2007 through May 2008 3.00% for the first month, plus an additional 1/12th
of 1.75% for each month thereafter.
June 2008 through May 2009 4.75% for the first month, plus an additional 1/12th
of 0.75% for each month thereafter.
June 2009 through May 2010 5.50% for the first month, plus an additional 1/12th
of 0.25% for each month thereafter.
June 2010 and thereafter 5.75% for each month
17
"Custodial Agreement": Any agreement that may be entered into by the Trustee and
any Custodian or any agreement assigned to the Trustee providing for holding and
safekeeping of Mortgage Files on behalf of the Trust.
"Custodian": A custodian appointed as provided in Section 8.11 hereof pursuant
to a Custodial Agreement.
"Cut-off Date": With respect to each Closing Date Mortgage Loan, May 1, 2004;
and with respect to each Qualified Substitute Mortgage Loan, its date of
substitution, as applicable.
"Cut-off Date Aggregate Principal Balance": The aggregate of the Cut-off Date
Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan, the unpaid
principal balance thereof as of the Cut-off Date (with respect to a Closing Date
Mortgage Loan); or as of the applicable date of substitution (with respect to a
Qualified Substitute Mortgage Loan), after giving effect to scheduled payments
due on or before the Cut-off Date, whether or not received.
"Debt Service Reduction": With respect to any Mortgage Loan, a reduction in the
scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
resulting from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation of the
related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.01(b) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by one or
more Qualified Substitute Mortgage Loans.
"Delinquency Percentage": With respect to any Distribution Date, the percentage
obtained by dividing (x) the aggregate Stated Principal Balance of (i) Mortgage
Loans Delinquent 60 days or more, (ii) REO Properties related to the Mortgage
Loans and (iii) Mortgage Loans in foreclosure and in bankruptcy (excluding any
such Mortgage Loans which are less than 60 days Delinquent under the bankruptcy
plan) by (y) the aggregate Stated Principal Balance of the Mortgage Loans, in
each case, calculated prior to taking into account payments of principal on the
Mortgage Loans due on the related Due Date or received during the related
Prepayment Period.
"Delinquency Trigger Event": A Delinquency Trigger Event has occurred with
respect to a Distribution Date if the Delinquency Percentage exceeds 42.00% of
the Credit Enhancement Percentage.
18
"Delinquent": With respect to any Mortgage Loan and related Monthly Payment, the
Monthly Payment due on a Due Date which is not made by the Close of Business on
the next scheduled Due Date for such Mortgage Loan. For example, a Mortgage Loan
is 60 or more days Delinquent if the Monthly Payment due on a Due Date is not
made by the Close of Business on the second scheduled Due Date after such Due
Date.
"Depositor": Long Beach Securities Corp., a Delaware corporation, or any
successor in interest.
"Depository": The initial Depository shall be The Depository Trust Company,
whose nominee is Cede & Co., or any other organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other financial institution
or other Person for whom from time to time a Depository effects book-entry
transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 15th day of the
calendar month in which such Distribution Date occurs or, if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the REMIC other than through an
Independent Contractor; provided, however, that the Trustee (or the Master
Servicer on behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master 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": Any: (A) "disqualified organization" under Section
860E of the Code, which as of the Closing Date is any of (i) the United States,
any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, or (iii) any organization described in Section 1381(a)(2)(C) of the Code;
(B) "electing large partnership" within the meaning of Section 775 of the Code;
or (C) other Person so designated by the Trustee based upon an Opinion of
Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Residual Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in a Residual Certificate to such Person. A corporation
will not be treated as an instrumentality of the United States or of any state
19
or political subdivision thereof if all of its activities are subject to income
tax and a majority of its board of directors is not selected by a governmental
unit. The terms "United States," "state" and "international organization" shall
have the meanings set forth in Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and maintained by
the Trustee pursuant to Section 3.10(b) which shall be entitled "Distribution
Account, Deutsche Bank National Trust Company, as Trustee, in trust for the
registered Certificateholders of Long Beach Mortgage Loan Trust 2004-2,
Asset-Backed Certificates, Series 2004-2" 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 June 2004.
"Due Date": With respect to each Distribution Date, the first day of the
calendar month in which such Distribution Date occurs, which is the day of the
month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
"Due Period": With respect to any Distribution Date, the period commencing on
the second day of the month preceding the month in which such Distribution Date
occurs and ending on the first day of the month in which such Distribution Date
occurs.
"Effective Date": As defined in Section 3.13 hereof.
"Eligible Account": Any of (i) an account or accounts maintained with a federal
or state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository institution
or trust company that is the principal subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated no
lower than P-1 by Xxxxx'x, F-1 by Fitch and A-1 by S&P (or comparable ratings if
Xxxxx'x, Fitch and S&P are not the Rating Agencies) at the time any amounts are
held on deposit therein; provided that so long as Washington Mutual Bank, FA is
the Sub-Servicer, any account maintained with Washington Mutual Bank, FA shall
be an Eligible Account if the long-term unsecured debt obligations of Washington
Mutual Bank, FA are rated no lower than "A2" by Xxxxx'x, or "A" by Fitch and
"A-" by S&P and the short-term unsecured debt obligations of Washington Mutual
Bank, FA are rated no lower than A-2 by S&P, provided that if the long-term
unsecured debt obligations of Washington Mutual Bank, FA are downgraded by S&P
to a rating lower than "A-" or the short-term unsecured debt obligations of
Washington Mutual Bank, FA are downgraded by S&P to a rating lower than A-2,
Washington Mutual Bank, FA shall transfer the deposits in any account maintained
by Washington Mutual Bank, FA (unless any such account is otherwise qualified as
an Eligible Account pursuant to (ii), (iii) or (iv) of the definition of
Eligible Account) to an Eligible Account within ten (10) Business Days of
notification of such downgrade, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
20
acting in its fiduciary capacity or (iv) an account otherwise acceptable to the
NIMS Insurer and each Rating Agency without reduction or withdrawal of their
then current ratings of the Certificates as evidenced by a letter from each
Rating Agency to the Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"Escrow Payments": As defined in Section 3.09 hereof.
"Excess Overcollateralized Amount": With respect to 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 Net Monthly Excess Cashflow for such Distribution Date and
(y) the Overcollateralization Deficiency Amount for such Distribution Date.
"Extraordinary Trust Fund Expense": Any amounts reimbursable to the Trustee, or
any director, officer, employee or agent of the Trustee, from the Trust Fund
pursuant to Section 8.05, any amounts payable from the Distribution Account in
respect of taxes pursuant to Section 10.01(g)(iii), any amounts payable from the
Distribution Account in respect of any REMIC pursuant to Section 10.01(c), any
amounts payable from the Trust Fund as a trustee fee for any successor trustee
and any amounts payable by the Trustee for the recording of the assignments of
mortgage pursuant to Section 2.01.
"Xxxxxx Xxx": Federal National Mortgage Association, or any successor thereto.
"FDIC": Federal Deposit Insurance Corporation, or any successor thereto.
"Final Recovery Determination": With respect to any defaulted Mortgage Loan or
any REO Property (other than a Mortgage Loan or REO Property purchased by the
Seller or the Master Servicer pursuant to or as contemplated by Section 2.03,
3.16(c) or 9.01), a determination made by the Master Servicer that all Insurance
Proceeds, Liquidation Proceeds and other payments or recoveries which the Master
Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Master Servicer shall
maintain records, prepared by a Servicing Representative, of each Final Recovery
Determination made thereby.
"Fitch": Fitch Ratings, Inc., or its successor in interest.
"Fixed Rate Mortgage Loan": A Mortgage Loan which provides for a fixed Mortgage
Rate payable with respect thereto.
21
"Formula Rate": For any Distribution Date and the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates, the lesser of (i) LIBOR
plus the related Certificate Margin and (ii) the related Maximum Cap Rate.
"Xxxxxxx Mac": The Federal Home Loan Mortgage Corporation, or any successor
thereto.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the Index on
each Adjustment Date in accordance with the terms of the related Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
"Gross Subsequent Recoveries": Any unexpected recoveries related to a Liquidated
Mortgage Loan received by the Master Servicer which were allocated as a Realized
Loss in reducing a Certificate Principal Balance of a Class of the Mezzanine
Certificates or the Class B Certificates on a Distribution Date prior to the
Prepayment Period in which such funds were received. Gross Subsequent Recoveries
may include but are not limited to unanticipated insurance settlements, tax
refunds, or mortgage bankruptcy distributions.
"Group I Closing Date Mortgage Loans": Any of the Group I Mortgage Loans
included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group I Closing Date Mortgage Loans is equal to
$1,155,699,743.86.
"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 or to
Compensating Interest paid by the Master Servicer with respect to the Group I
Mortgage Loans.
"Group I Mortgage Loans": Those Mortgage Loans identified as Group I Mortgage
Loans on the Mortgage Loan Schedule.
"Group I Principal Allocation Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group I
Principal Remittance Amount for such Distribution Date, and the denominator of
which is (y) the Principal Remittance Amount for such Distribution Date.
"Group I Principal Distribution Amount": The sum of (i) (x) the Group I
Principal Remittance Amount minus (y) the amount of any Overcollateralization
Release Amount multiplied by the Group I Principal Allocation Percentage for
such Distribution Date, and (ii) the Extra Principal Distribution Amount
multiplied by the Group I Principal Allocation Percentage for such Distribution
Date.
"Group I Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) all scheduled payments of principal collected or advanced on the
Group I Mortgage Loans by the Master Servicer that were due during the related
Due Period, (ii) all partial and full principal prepayments of the Group I
Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds, Insurance
Proceeds and Gross Subsequent Recoveries received during the related Prepayment
Period with respect to the Group I Mortgage Loans, (iv) that portion of the
22
Purchase Price, representing principal of any repurchased Group I Mortgage Loan,
deposited to the Collection Account during the related Prepayment Period, (v)
the principal portion of any Substitution Adjustments deposited in the
Collection Account during the related Prepayment Period with respect to the
Group I Mortgage Loans and (vi) on the Distribution Date on which the Trust is
to be terminated in accordance with this Agreement, that portion of the
Termination Price representing principal with respect to the Group I Mortgage
Loans.
"Group I Senior Principal Distribution Amount": With respect to any Distribution
Date on or after the Stepdown Date and on which a Trigger Event is not in
effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Class A-1 Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the aggregate 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) 65.30% and (ii) the aggregate
Stated Principal Balance of the Group I Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus $5,778,481.97.
"Group II Closing Date Mortgage Loans": Any of the Group II Mortgage Loans
included in the Trust Fund on the Closing Date. The aggregate Cut-off Date
Principal Balance of the Group II Closing Date Mortgage Loans is equal to
$363,439,508.57.
"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 or to
Compensating Interest paid by the Master Servicer with respect to the Group II
Mortgage Loans.
"Group II Mortgage Loans": Those Mortgage Loans identified as Group II Mortgage
Loans on the Mortgage Loan Schedule.
"Group II Principal Allocation Percentage": For any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is (x) the Group II
Principal Remittance Amount for such Distribution Date, and the denominator of
which is (y) the Principal Remittance Amount for such Distribution Date.
"Group II Principal Distribution Amount": With respect to any Distribution Date,
the sum of (i) (x) the Group II Principal Remittance Amount minus (y) the amount
of any Overcollateralization Release Amount multiplied by the Group II Principal
Allocation Percentage for such Distribution Date, and (ii) the Extra Principal
Distribution Amount multiplied by the Group II Principal Allocation Percentage
for such Distribution Date.
"Group II Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) all scheduled payments of principal collected or advanced on the
Group II Mortgage Loans by the Master Servicer that were due during the related
23
Due Period, (ii) all partial and full principal prepayments of the Group II
Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, (iii) the principal portion of all Net Liquidation Proceeds, Insurance
Proceeds and Gross Subsequent Recoveries received during the related Prepayment
Period with respect to the Group II Mortgage Loans, (iv) that portion of the
Purchase Price, representing principal of any repurchased Group II Mortgage
Loan, deposited to the Collection Account during the related Prepayment Period,
(v) the principal portion of any Substitution Adjustments deposited in the
Collection Account during the related Prepayment Period with respect to the
Group II Mortgage Loans and (vi) on the Distribution Date on which the Trust is
to be terminated in accordance with this Agreement, that portion of the
Termination Price representing principal with respect to the Group II Mortgage
Loans.
"Group II Senior Certificates": The Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates.
"Group II Senior Principal Distribution Amount": With respect to any
Distribution Date on or after the Stepdown Date and on which a Trigger Event is
not in effect, the amount equal to the lesser of (I) the aggregate Certificate
Principal Balance of the Group II Senior Certificates immediately prior to such
Distribution Date and (II) the excess of (x) the aggregate Certificate Principal
Balance of the Group II Senior Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 65.30% and (ii)
the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Group II Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus $1,817,198.10.
"Indenture": The indenture or a document of similar import, if any, entered into
following the Closing Date, by one or more Affiliates of the Depositor or one or
more entities sponsored by an Affiliate of the Depositor relating to the NIM
Notes to be issued thereunder.
"Independent": When used with respect to any specified Person, any such Person
who (a) is in fact independent of the Depositor, the Master Servicer and their
respective Affiliates, (b) does not have any direct financial interest in or any
material indirect financial interest in the Depositor or the Master Servicer or
any Affiliate thereof, and (c) is not connected with the Depositor or the Master
Servicer or any Affiliate thereof as an officer, employee, promoter,
underwriter, trustee, trust administrator, partner, director or Person
performing similar functions; provided, however, that a Person shall not fail to
be Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the Master Servicer)
that would be an "independent contractor" with respect to any of the REMICs
created hereunder within the meaning of Section 856(d)(3) of the Code if such
REMIC were a real estate investment trust (except that the ownership tests set
forth in that Section shall be considered to be met by any Person that owns,
24
directly or indirectly, 35% or more of any Class of Certificates), so long as
each such REMIC does not receive or derive any income from such Person and
provided that the relationship between such Person and such REMIC is at arm's
length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or
(ii) any other Person (including the Master Servicer) if the Trustee has
received an Opinion of Counsel to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code), or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"Index": With respect to each Adjustable Rate Mortgage Loan and with respect to
each related Adjustment Date, the index as specified in the related Mortgage
Note.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.
"Initial Notional Amount": With respect to any Class C Certificate, the amount
designated "Initial Notional Amount" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or other
insurance policy covering a Mortgage Loan or the related Mortgaged Property
(including any related PMI Policy), to the extent such proceeds are not (i) to
be applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, subject to the
terms and conditions of the related Mortgage Note and Mortgage or (ii) Gross
Subsequent Recoveries with respect to such Mortgage Loan.
"Insured NIM Notes": Net interest margin securities, if any, issued by one or
more Affiliates of the Depositor or by one or more entities sponsored by an
Affiliate of the Depositor which are backed, in whole or in part, by the
cashflow on certain or all of the Class C Certificates and the Class P
Certificates and insured by the NIMS Insurer.
"Interest Determination Date": With respect to the Class A Certificates, the
Mezzanine Certificates and the Class B Certificates and each Accrual Period, the
second LIBOR Business Day preceding the commencement of such Accrual Period.
"Interest Remittance Amount": The Group I Interest Remittance Amount and the
Group II Interest Remittance Amount.
"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, Gross Subsequent Recoveries 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.
25
"LIBOR": With respect to each Accrual Period, the rate determined by the Trustee
on the related Interest Determination Date on the basis of the "Interest
Settlement Rate" for United States dollar deposits of one-month maturity set
forth by the British Bankers' Association (the "BBA"), as such rate appears on
the Telerate Page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date. With respect to any Interest Determination Date, if the
BBA's Interest Settlement Rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on such date, or if Telerate Page 3750 is not available on
such date the Trustee will obtain such rate from Reuters Monitor Money Rates
Service page "LIBOR01" or Bloomberg L.P. page "BBAM." Alternatively, the Trustee
may request the principal London office of each of the Reference Banks to
provide a quotation of its rate. On such Interest Determination Date, LIBOR for
the related Accrual Period will be established by the 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 multiples of 0.03125%); and
(ii) If on such Interest Determination Date fewer than two Reference Banks
provide such offered quotations, LIBOR for the related Accrual Period shall be
the higher of (i) LIBOR as determined on the previous Interest Determination
Date and (ii) the Reserve Interest Rate.
The Trustee will select a particular index as the alternative index only if it
receives an Opinion of Counsel that the selection of such index will not cause
any REMIC to lose its classification as a REMIC for federal income tax purposes.
"LIBOR Business Day": Any day on which banks in The City of London, England and
New York City are open for conducting transactions in foreign currency and
exchange.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan in
respect of which the Master Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Prepayment
Period, that all Liquidation Proceeds which it expects to recover with respect
to the liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the following
events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
With respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from the Trust Fund by reason of its being sold or purchased pursuant
to Section 3.23 or Section 9.01.
"Liquidation Proceeds": The amount (other than amounts received in respect of
the rental of any REO Property prior to REO Disposition) received by the Master
Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation, (ii) the
26
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 9.01.
"Loan Group": Either Loan Group I or Loan Group II.
"Loan Group I": All of the Group I Mortgage Loans collectively.
"Loan Group II": All of the Group II Mortgage Loans collectively.
"Loan-to-Value Ratio": As of any date and as to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the (x) Principal Balance
of the Mortgage Loan (if such Mortgage Loan is secured by a first lien on the
related Mortgaged Property) or the sum of the Principal Balance of the Mortgage
Loan and any other mortgage loan secured by a senior lien on the related
Mortgaged Property (if such Mortgage Loan is secured by a junior lien on the
related Mortgaged Property) and the denominator of which is (y) the Value of the
related Mortgaged Property.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Seller certifying that the original Mortgage
Note has been lost or destroyed (together with a copy of the related Mortgage
Note and indemnifying the Trust against any loss, cost or liability resulting
from the failure to deliver the original Mortgage Note) in the form of Exhibit H
hereto.
Marker Rate: With respect to the Class C Interest and any Distribution Date
other than the first Distribution Date, a per annum rate equal to two (2)
multiplied by the weighted average of the Pass-Through Rates for REMIC 1 Regular
Interests LT1-A1, LT1-A2, LT1-A3, LT1-A4, LT1-M1, LT1-M2, LT1-M3, LT1-M4,
LT1-M5, LT1-M6, LT1-M7, LT1-B and LT1-ZZ, with the rates on each such REMIC 1
Regular Interest (other the REMIC 1 Regular Interest LT1-ZZ) subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin for the
Corresponding Certificate for such REMIC 1 Regular Interest, and (ii) the Net
WAC Rate for the Corresponding Certificates, and the rate on REMIC 1 Regular
Interest LT1-ZZ subject to a cap of zero for purposes of this calculation and
with the rates on all of the REMIC 1 Regular Interests multiplied by a fraction
the numerator of which is the actual number of days elapsed in the Accrual
Period for each such REMIC 1 Regular Interest and the denominator of which is
30. With respect to the Class C Interest and the first Distribution Date, a per
annum rate equal to the weighted average of the Uncertificated Pass-Through
Rates for REMIC 1 Regular Interests LT1-AA, LT1-A1, LT1-A2, LT1-A3, LT1-A4,
LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7, LT1-B, and LT1-ZZ,
weighted on the basis of the initial Uncertificated Principal Balances of each
such interest.
"Master Servicer": Long Beach Mortgage Company, a Delaware corporation, or any
successor servicer appointed as herein provided, in its capacity as Master
Servicer hereunder.
"Master Servicer Event of Default": One or more of the events described in
Section 7.01.
27
"Master Servicer Prepayment Charge Payment Amount": The amounts (i) payable by
the Master Servicer in respect of any Prepayment Charges waived other than in
accordance with the standard set forth in Section 2.04(a)(viii) or (ii)
collected from the Master Servicer in its capacity as Seller in respect of a
remedy for the breach of the representation and warranty made by the Master
Servicer in its capacity as Seller set forth in Section 2.04(a)(vii).
"Master Servicer Remittance Date": With respect to any Distribution Date, 3:00
p.m. New York time on the Business Day preceding the Distribution Date.
"Master Servicer Termination Test": With respect to any Distribution Date, the
Master Servicer Termination Test will be failed with respect to the Master
Servicer if the Cumulative Loss Percentage exceeds 6.125%.
"Maximum Cap Rate":
For any Distribution Date and the Class A-1 Certificates, a per annum rate equal
to (a) the weighted average of the Adjusted Net Maximum Mortgage Rates of the
Group I Mortgage Loans, weighted on the basis of the Stated Principal Balances
thereof as of the Due Date in the month preceding the month of such Distribution
Date multiplied by (b) a fraction the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.
For any Distribution Date and the Group II Senior Certificates, a per annum rate
equal to (a) the weighted average of the Adjusted Net Maximum Mortgage Rates of
the Group II Mortgage Loans, weighted on the basis of the Stated Principal
Balances thereof as of the Due Date in the month preceding the month of such
Distribution Date multiplied by (b) a fraction the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Accrual Period.
For any Distribution Date and the Mezzanine Certificates and the Class B
Certificates, a per annum rate equal to (a) the weighted average (weighted on
the basis of the results of subtracting from the aggregate principal balance of
each Loan Group, the sum of the current Certificate Principal Balances of the
related Classes of the Class A Certificates) of (i) the weighted average of the
Adjusted Net Maximum Mortgage Rates of the Group I Mortgage Loans and (ii) the
weighted average of the Adjusted Net Maximum Mortgage Rates of the Group II
Mortgage Loans, multiplied by (b) a fraction the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Accrual Period.
"Maximum LT1-ZZ Uncertificated Accrued Interest Deferral Amount": With respect
to any Distribution Date, the excess of (i) Uncertificated Accrued Interest
calculated with the Uncertificated Pass-Through Rate for REMIC 1 Regular
Interest LT1-ZZ and an Uncertificated Principal Balance equal to the excess of
(x) the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1-ZZ over
(y) the REMIC 1 Overcollateralized Amount, in each case for such Distribution
Date, over (ii) Uncertificated Accrued Interest on REMIC 1 Regular Interests
LT1-A1, LT1-A2, LT1-A3, LT1-A4, LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6,
LT1-M7 and LT1-B, with the rate on each such REMIC 1 Regular Interest subject to
a cap equal to the lesser of (i) LIBOR plus the Certificate Margin for the
Corresponding Certificate for such REMIC 1 Regular Interest, and (ii) the Net
WAC Rate for the Corresponding Certificates; provided, however, that for this
28
purpose, calculations of the Uncertificated REMIC 1 Pass-Through Rate and the
related caps with respect to all of the REMIC 1 Regular Interests shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.
"Maximum Mortgage Rate": With respect to each Mortgage Loan, the percentage set
forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.
"Mezzanine Certificates": The Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class M-4 Certificates, the Class
M-5 Certificates, the Class M-6 Certificates and the Class M-7 Certificates.
"Minimum Mortgage Rate": With respect to each Mortgage Loan, the percentage set
forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.
"Monthly Interest Distributable Amount": With respect to any Distribution Date
and the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, the amount of interest accrued during the related Accrual Period
at the related Pass-Through Rate on the Certificate Principal Balance of such
Class immediately prior to such Distribution Date. With respect to the Class C
Interest and any Distribution Date, the amount of interest accrued during the
related Accrual Period at the related Pass-Through Rate on the Notional Amount
of such Class immediately prior to such Distribution Date. With respect to the
Class C Certificates and any Distribution Date, the Monthly Interest
Distributable Amount shall equal the Monthly Interest Distributable Amount for
the Class C Interest.
In all cases, the Monthly Interest Distributable Amount for any Class of
Certificates and the Class C Interest shall be reduced by any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls allocated to such Class
under Section 1.03.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by the
related Mortgagor from time to time under the related Mortgage Note, determined:
(a) after giving effect to (i) any Deficient Valuation and/or Debt Service
Reduction with respect to such Mortgage Loan and (ii) any reduction in the
amount of interest collectible from the related Mortgagor pursuant to the Relief
Act; (b) without giving effect to any extension granted or agreed to by the
Master Servicer pursuant to Sections 3.01 and 3.07; and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a first
lien or second lien on, or first priority security interest in or second
priority security interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01 pertaining to a
particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.
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"Mortgage Loan": Each mortgage loan transferred and assigned to the Trustee and
delivered to the Trustee or another Custodian pursuant to Section 2.01 or
Section 2.03(d) as from time to time held as a part of the Trust Fund, the
Mortgage Loans so held being identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the Master Servicer,
in its capacity as Seller, and the Depositor, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor,
substantially in the form attached hereto as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans included in
REMIC 1 on such date, attached hereto as Exhibit D. The Mortgage Loan Schedule
shall be prepared by the Seller and shall set forth the following information as
of the Cut-off Date with respect to each Mortgage Loan, as applicable:
(i) the Mortgagor's name and the originator's Mortgage Loan identifying number;
(ii) the street address of the Mortgaged Property including the state and zip
code;
(iii) a code indicating whether the Mortgaged Property is owner-occupied;
(iv) the type of Residential Dwelling constituting the Mortgaged Property;
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio and the combined Loan-to-Value Ratio at
origination;
(vii) the Mortgage Rate in effect immediately following the Cut-off Date;
(viii) the date on which the first Monthly Payment was due on the Mortgage Loan;
(ix) the stated maturity date;
(x) the amount of the Monthly Payment due on the first Due Date after the
Cut-off Date;
(xi) the last Due Date on which a Monthly Payment was actually applied to the
unpaid Stated Principal Balance;
(xii) the original principal amount of the Mortgage Loan;
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(xiii) the Stated Principal Balance of the Mortgage Loan as of the Close of
Business on the Cut-off Date;
(xiv) whether such Mortgage Loan is a Fixed Rate Mortgage Loan or an Adjustable
Rate Mortgage Loan, and with respect to each Adjustable Rate Mortgage Loan: (a)
the Gross Margin, (b) the Maximum Mortgage Rate, (c) the Minimum Mortgage Rate,
(d) the Periodic Rate Cap for the first Adjustment Date and each subsequent
Adjustment Date and (e) the next Adjustment Date immediately following the
Cut-off Date;
(xv) a code indicating the purpose of the Mortgage Loan (i.e., purchase
financing, rate/term refinancing, cash-out refinancing);
(xvi) the Mortgage Rate at origination;
(xvii) a code indicating the documentation program;
(xviii) the Seller's risk grade and the FICO score;
(xix) the Value of the Mortgaged Property;
(xx) the sale price of the Mortgaged Property, if applicable;
(xxi) whether such Mortgage Loan is secured by a first lien or a second lien on
the related Mortgaged Property;
(xxii) the date of origination;
(xxiii) the stated remaining months to maturity as of the Cut-off Date;
(xxiv) the current principal and interest payment of the Mortgage Loan as of the
Cut-off Date;
(xxv) the interest "paid to date" of the Mortgage Loan as of the Cut-off Date;
(xxvi) a code indicating whether the Mortgage Loan is a Group I Mortgage Loan or
a Group II Mortgage Loan;
(xxvii) a code indicating the Index that is associated with such Mortgage Loan
(if such Mortgage Loan is an Adjustable Rate Mortgage Loan);
(xxviii) the rate adjustment frequency (if such Mortgage Loan is an Adjustable
Rate Mortgage Loan);
(xxix) the number of years the prepayment penalty is in effect; and
(xxx) a code indicating that such Mortgage Loan is covered under the PMI Policy.
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The Mortgage Loan Schedule shall set forth the following information, with
respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the
number of Mortgage Loans; (2) the Cut-off Date Principal Balance of the Mortgage
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement. With respect to any Qualified Substitute Mortgage
Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein. The
Mortgage Loan Schedule shall clearly identify the Mortgage Loans that are
included in Group I Mortgage Loans and those that are included in Group II
Mortgage Loans.
"Mortgage Note": The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D from time
to time, and any REO Properties acquired in respect thereof.
"Mortgage Rate": With respect to each Fixed Rate Mortgage Loan, the annual rate
set forth in the related Mortgage Note, as amended, modified or supplemented
from time to time. With respect to each Adjustable Rate Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (A) as
of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date, to equal the sum, rounded to the next highest or nearest
0.125% (as provided in the Mortgage Note), of the Index, determined as set forth
in the related Mortgage Note, plus the related Gross Margin subject to the
limitations set forth in the related Mortgage Note. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of a fee simple or leasehold estate in a
parcel of real property improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage Loan or any
other disposition of related Mortgaged Property (including REO Property), the
related Liquidation Proceeds net of Advances, Servicing Advances, Servicing Fees
and any other servicing fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property in accordance with the
terms of this Agreement.
"Net Monthly Excess Cashflow": With respect to each Distribution Date, the sum
of (a) any Overcollateralization Release Amount for such Distribution Date and
(b) the positive excess of (x) Available Funds for such Distribution Date over
(y) the sum for such Distribution Date of (A) the Monthly Interest Distributable
32
Amounts for the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class A
Certificates and (C) the Principal Remittance Amount.
"Net Mortgage Rate": With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of interest equal
to the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing
Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution Date, the
excess, if any, of any Prepayment Interest Shortfalls for such date over the
related Compensating Interest.
"Net WAC Rate":
For any Distribution Date and the Class A-1 Certificates, a per annum rate equal
to (a) the weighted average of the Adjusted Net Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the Due Date in the month preceding the month of such Distribution Date
multiplied by (b) a fraction the numerator of which is 30 and the denominator of
which is the actual number of days elapsed in the related Accrual Period. For
federal income tax purposes, the Net WAC Rate for the Class A-1 Certificates
shall be expressed as a rate equal to the Uncertificated REMIC 1 Pass-Through
Rate for REMIC 1 Regular Interest LT1-1GRP multiplied by a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Accrual Period.
For any Distribution Date and the Group II Senior Certificates, a per annum rate
equal to (a) the weighted average of the Adjusted Net Mortgage Rates of the
Group II Mortgage Loans, weighted on the basis of the Stated Principal Balances
thereof as of the Due Date in the month preceding the month of such Distribution
Date multiplied by (b) a fraction the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period. For federal income tax purposes, the Net WAC Rate for the Group II
Senior Certificates shall be expressed as a rate equal to the Uncertificated
REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest LT1-2GRP multiplied by a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Accrual Period.
For any Distribution Date and the Mezzanine Certificates and the Class B
Certificates, the Subordinated Net WAC Rate.
"Net WAC Rate Carryover Amount": With respect to the Class A Certificates, the
Mezzanine Certificates, the Class B Certificates and any Distribution Date for
which the Pass-Through Rate for such Class of Certificates for such Distribution
Date is the related Net WAC Rate, the sum of (i) the positive excess of (A) the
amount of interest that would have been payable to such Class of Certificates on
such Distribution Date if the Pass-Through Rate for such Class of Certificates
for such Distribution Date were calculated at the related Formula Rate over (B)
the amount of interest payable on such Class of Certificates at the related Net
WAC Rate for such Distribution Date and (ii) the related Net WAC Rate Carryover
Amount for the previous Distribution Date not previously paid together with
interest thereon at a rate equal to the related Formula Rate for such Class of
Certificates for the most recently ended Accrual Period.
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"New Lease": Any lease of REO Property entered into on behalf of the Trust,
including any lease renewed or extended on behalf of the Trust if the Trust has
the right to renegotiate the terms of such lease.
"NIM Notes": The Insured NIM Notes and the Other NIM Notes.
"NIMS Insurer": A Person, or any of its successors that shall be the insurer
under an insurance policy insuring certain payments on Insured NIM Notes, if
any, provided, however, upon the occurrence of certain events (as set forth in
the Indenture and/or any other agreement among such Person, Long Beach Asset
Holdings Corp., the Master Servicer, the Trustee and other Persons), the NIMS
Insurer shall be the Person designated in the Indenture or such other agreement.
If none of the net interest margin securities have been issued by one or more of
the Affiliates of the Depositor or by one or more entities which are sponsored
by an Affiliate of the Depositor, that are insured by an insurance policy, there
shall be no NIMS Insurer under this Agreement, all references to the NIMS
Insurer or Insured NIM Notes in this agreement are for administrative
convenience only, shall be completely disregarded and no Person shall have any
rights of the NIMS Insurer under this Agreement.
"NIMS Insurer Default": The existence and continuation of any default by the
NIMS Insurer (including a failure by the NIMS Insurer to make a payment) under
an insurance policy or policies issued in connection with the Indenture.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Master Servicer, will not or, in the case of
a proposed Advance or Servicing Advance, would not be ultimately recoverable
from related late payments, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
"Notional Amount": With respect to the Class C Interest, immediately prior to
any Distribution Date, an amount equal to the aggregate of the Uncertificated
Principal Balances of the REMIC 1 Regular Interests. With respect to the Class C
Certificates, immediately prior to any Distribution Date, an amount equal to the
Notional Amount of the Class C Interest.
"Officers' Certificate": A certificate signed by the Chairman of the Board, the
Vice Chairman of the Board, the President or a vice president (however
denominated), and by the Treasurer, the Secretary, or one of the assistant
treasurers or assistant secretaries of the Master Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without limitation,
be a salaried counsel for the Depositor or the Master Servicer, reasonably
acceptable to the Trustee, if such opinion is delivered to the Trustee, except
that any opinion of counsel relating to (a) the qualification of any Trust REMIC
as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
Independent counsel.
"Optional Termination Date": The first Distribution Date on which the Terminator
may elect to terminate the Trust Fund pursuant to Section 9.01.
34
"Original Class Certificate Principal Balance": With respect to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Certificate, the corresponding Certificate Principal Balance on the Closing
Date.
"Original Class Notional Amount": With respect to the Class C Interest,
$1,519,139,252.43.
"Other NIM Notes": Net Interest Margin Securities, if any, issued by one or more
Affiliates of the Depositor or by one or more entities sponsored by an Affiliate
of the Depositor, which are backed, in whole or in part, by the cashflow on
certain Class C Certificates and Class P Certificates and not insured by any
NIMS Insurer.
"Overcollateralization Deficiency Amount": With respect to any Distribution
Date, the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount on such Distribution Date (assuming that
100% of the aggregate Principal Remittance Amount is applied as a principal
payment on such Distribution Date).
"Overcollateralization Floor": $7,595,680.07.
"Overcollateralization Release Amount": With respect to any Distribution Date,
the lesser of (x) the Principal Remittance Amount for such Distribution Date and
(y) the Excess Overcollateralized Amount.
"Overcollateralization Target Amount": With respect to any Distribution Date (i)
prior to the Stepdown Date, 1.10% of the aggregate Cut-off Date Principal
Balance of the Closing Date Mortgage Loans, (ii) on or after the Stepdown Date
provided a Trigger Event is not in effect, the greater of (x) the lesser of (I)
1.10% of the aggregate Cut-off Date Principal Balance of the Closing Date
Mortgage Loans and (II) 2.20% of the aggregate Stated Principal Balance of the
Mortgage Loans on the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (y) the Overcollateralization Floor, and
(iii) on or after the Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Distribution
Date.
"Overcollateralized Amount": With respect to any Distribution Date, the amount,
if any, by which (i) the aggregate Stated Principal Balance of the Mortgage
Loans on the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) exceeds (ii) the sum of the aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates, the
Class B Certificates and the Uncertificated Principal Balance of the Class P
Interest as of such Distribution Date (after giving effect to distributions to
be made on such Distribution Date, other than distributions of the Extra
Principal Distribution Amount, if any).
"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.
35
"Pass-Through Rate":
With respect to the Class A Certificates, the Mezzanine Certificates and the
Class B Certificates for any Distribution Date (other than the first
Distribution Date), the lesser of (x) the related Formula Rate for such
Distribution Date and (y) the related Net WAC Rate for such Distribution Date.
With respect to the Class A Certificates, the Mezzanine Certificates and the
Class B Certificates and the first Distribution Date, the related Formula Rate
for such Distribution Date.
For federal income tax purposes, the Pass-Through Rate will be calculated
without respect to any amounts paid in excess of the applicable strike rate set
forth in the Cap Agreements, which such amounts shall be deemed to be paid in
respect of Net WAC Rate Carryover Amounts and paid outside of any REMIC created
herein.
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 (O) below, and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interests LT1-AA, LT1-A1, LT1-A2, LT1-A3, LT1-A4, LT1-M1,
LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7, LT1-B, LT1-ZZ and LT1-P. For
purposes of calculating the Pass-Through Rate for the Class C Interest, the
numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-AA minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-A1 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-A2 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-A2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-A3 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-A3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-A4 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-A4;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M1 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M1;
36
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M2 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M2;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M3 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M3;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M4 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M4;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M5 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M5;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M6 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M6;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-M7 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-M7;
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-B minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-B;
(N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-ZZ minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1-ZZ; and
(O) 100% of the interest on REMIC 1 Regular Interest LT1-P.
The Class C Certificates will not have a Pass-Through Rate, but will be entitled
to 100% of the distributions on the Class C Interest.
"Percentage Interest": With respect to any Certificate (other than a Residual
Certificate), a fraction, expressed as a percentage, the numerator of which is
the Initial Certificate Principal Balance or Initial Notional Amount represented
by such Certificate and the denominator of which is the Original Class
Certificate Principal Balance or Original Class Notional Amount of the related
Class. With respect to a Residual Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, with respect to each Class referred to in this
paragraph, that the sum of all such percentages for each such Class totals 100%.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan and any
Adjustment Date therefor, the fixed percentage set forth in the related Mortgage
Note, which is the maximum amount by which the Mortgage Rate for such Mortgage
37
Loan may increase or decrease (without regard to the Maximum Mortgage Rate or
the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in
effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following obligations or
securities acquired at a purchase price of not greater than par, regardless of
whether issued or managed by the Depositor, the Master Servicer, the NIMS
Insurer, the Trustee or any of their respective Affiliates or for which an
Affiliate of the NIMS Insurer or the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to timely payment
of principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit of
the United States;
(ii) (A) demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by or federal funds sold by any depository institution or
trust company (including the Trustee or its agents acting in their commercial
capacities) incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution or trust
company (or, if the only Rating Agency is S&P, in the case of the principal
depository institution in a depository institution holding company, debt
obligations of the depository institution holding company) or its ultimate
parent has a short-term uninsured debt rating in one of the two highest
available ratings of Fitch and the highest available rating category of Xxxxx'x
and S&P and provided that each such investment has an original maturity of no
more than 365 days; and provided further that, if the only Rating Agency is S&P
and if the depository or trust company is a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not separately
rated, the applicable rating shall be that of the bank holding company; and,
provided further that, if the original maturity of such short-term obligations
of a domestic branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+ in the
case of S&P if S&P is the Rating Agency; and (B) any other demand or time
deposit or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with respect to
any security described in clause (i) above and entered into with a depository
institution or trust company (acting as principal) rated F-1+ or higher by
Fitch, rated A-1+ by S&P and rated A2 or higher by Xxxxx'x;
(iv) securities bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States of America or any
State thereof and that are rated by each Rating Agency in its highest long-term
unsecured rating category at the time of such investment or contractual
commitment providing for such investment;
38
(v) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obligations payable on demand or on a specified date not
more than 30 days after the date of acquisition thereof) that is rated by each
Rating Agency in its highest short-term unsecured debt rating available at the
time of such investment;
(vi) units of taxable money market funds (which may be 12b-1 funds, as
contemplated under the rules promulgated by the Securities and Exchange
Commission under the Investment Company Act of 1940), which funds have the
highest rating available for such securities from the Rating Agencies or which
have been designated in writing by the Rating Agencies as Permitted Investments;
and
(vii) if previously confirmed in writing to the Trustee, 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.
The Trustee or its Affiliates are permitted to receive additional compensation
(such compensation shall not be an expense of the Trust or constitute an
Extraordinary Trust Fund Expense) that could be deemed to be in the Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments.
"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.
"PMI Insurer": None of the Mortgage Loans are insured by a primary mortgage
insurance policy. References to the PMI Insurer, PMI Insurer Fee, PMI Insurer
Fee Rate, PMI Mortgage Loans and PMI Policy are left in this Agreement for
39
administrative convenience and shall be completely disregarded. There are no PMI
Mortgage Loans nor any PMI Insurer under this Agreement and no Person shall have
any rights of the PMI Insurer under this Agreement.
"PMI Insurer Fee": The amount payable to the PMI Insurer on each Distribution
Date, which amount shall equal one twelfth of the product of (i) the PMI Insurer
Fee Rate, multiplied by (ii) the aggregate Stated Principal Balance of the PMI
Mortgage Loans and any related REO Properties as of the first day of the related
Due Period.
"PMI Insurer Fee Rate": 0.00% per annum.
"PMI Mortgage Loans": The Mortgage Loans insured by the PMI Insurer set forth on
the list of Mortgage Loans attached hereto as Schedule IV. There are no PMI
Mortgage Loans under this Agreement.
"PMI Policy": Not applicable.
"Prepayment Assumption": The pricing prepayment assumption as described in the
Prospectus Supplement.
"Prepayment Charge": With respect to any Mortgage Loan, the charges or premiums,
if any, due in connection with a full or partial prepayment of such Mortgage
Loan in accordance with the terms thereof (other than any Master Servicer
Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of the Cut-off Date, a list attached hereto as
Schedule I (including the Prepayment Charge Summary attached thereto), setting
forth the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the related Mortgage
Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time by the Master
Servicer in accordance with the provisions of this Agreement and a copy of each
related amendment shall be furnished by the Master Servicer to the NIMS Insurer
and the Trustee.
"Prepayment Interest Shortfall": With respect to any Distribution Date, for each
Mortgage Loan that was during the related Prepayment Period the subject of a
Principal Prepayment in full or in part that was applied by the Master Servicer
40
to reduce the outstanding principal balance of such loan on a date preceding the
Due Date in the succeeding Prepayment Period, an amount equal to interest at the
applicable Net Mortgage Rate on the amount of such Principal Prepayment for the
lesser of (i) the number of days commencing on the date on which the prepayment
is applied and ending on the last day of the related Prepayment Period and (ii)
30 days. The obligations of the Master Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the calendar month
immediately preceding the calendar month in which such Distribution Date occurs.
"Prime Rate": The prime rate of United States money center commercial banks as
published in The Wall Street Journal.
"Principal Balance": As to any Mortgage Loan other than a Liquidated Mortgage
Loan, and any day, the related Cut-off Date Principal Balance, minus all
collections credited against the Cut-off Date Principal Balance of any such
Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any day,
the Principal Balance of the related Mortgage Loan shall equal the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.
"Principal Distribution Amount": With respect to any Distribution Date, the sum
of the Group I Principal Distribution Amount and the Group II Principal
Distribution Amount.
"Principal Prepayment": Any payment of principal made by the Mortgagor on a
Mortgage Loan which is received in advance of its scheduled Due Date and which
is not accompanied by an amount of interest representing the full amount of
scheduled interest due on any Due Date in any month or months subsequent to the
month of prepayment.
"Principal Remittance Amount": With respect to any Distribution Date, the sum of
the Group I Principal Remittance Amount and the Group II Principal Remittance
Amount.
"Prospectus Supplement": That certain Prospectus Supplement dated April 28, 2004
relating to the public offering of the Class A Certificates and the Mezzanine
Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or
Section 9.01, and as confirmed by an Officers' Certificate from the Master
Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof as of the date of purchase (or such other price as
provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued
interest on such Stated Principal Balance at the applicable Net Mortgage Rate in
effect from time to time from the Due Date as to which interest was last paid by
the Mortgagor or by an advance by the Master Servicer through the end of the
calendar month in which the purchase is to be effected and (y) an REO Property,
the sum of (1) accrued interest on such Stated Principal Balance at the
applicable Net Mortgage Rate in effect from time to time from the Due Date as to
which interest was last paid by the Mortgagor or by an advance by the Master
Servicer through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
41
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed in respect of REO Imputed Interest
pursuant to Section 4.01, (iii) any unreimbursed Servicing Advances, Advances
and Nonrecoverable Advances and any unpaid Servicing Fees allocable to such
Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the
Collection Account in respect of such Mortgage Loan or REO Property pursuant to
Section 3.11 (a)(ix) and Section 3.16(b), (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.03, enforcement expenses
reasonably incurred or to be incurred by the NIMS Insurer, the Master Servicer
or the Trustee in respect of the breach or defect giving rise to the purchase
obligation and (vi) in the case of a Mortgage Loan required to be repurchased
pursuant to Section 2.03 because such Mortgage Loan is in breach of the
representation in Section 6(xlvi) of the Mortgage Loan Purchase Agreement, any
additional costs or damages in excess of the amounts to be paid pursuant to
clauses (i) through (v) above (including attorney's fees) incurred by the Trust
as a result of the Trust's status as an assignee or purchaser of such Mortgage
Loans.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured by the
aggregate principal balance) that is in excess of 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to those requirements set forth above, the Purchase Price shall include
the amount of any related Prepayment Charge (other than with respect to a
Purchase Price paid in connection with Section 9.01).
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx and Xxxxxxx
Mac.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for a Deleted
Mortgage Loan pursuant to the terms of this Agreement or the Mortgage Loan
Purchase Agreement which must, on the date of such substitution, (i) have an
outstanding principal balance (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance),
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of, and not more than 5.00%
less than, the outstanding principal balance of the Deleted Mortgage Loan as of
the Due Date in the calendar month during which the substitution occurs, (ii)
have a Mortgage Rate not less than (and not more than one percentage point in
excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
Maximum Mortgage Rate not greater than the Maximum Mortgage Rate on the Deleted
Mortgage Loan and have a Minimum Mortgage Rate not less than the Minimum
Mortgage Rate of the Deleted Mortgage Loan, (iv) if the Qualified Substitute
42
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Gross Margin equal to
or greater than the Gross Margin of the Deleted Mortgage Loan, (v) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vi) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (vii) be current (with no contractual delinquencies outstanding) as of the
date of substitution, (viii) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (ix) have a risk grading determined by the Seller
at least equal to the risk grading assigned on the Deleted Mortgage Loan, (x)
have been underwritten or reunderwritten by the Seller in accordance with the
same or, as determined by the Seller, more favorable, underwriting guidelines as
the Deleted Mortgage Loan, (xi) with respect to Qualified Substitute Mortgage
Loans substituted for Deleted Mortgage Loans that are Group I Mortgage Loans,
have had an original Principal Balance that conformed to Xxxxxx Xxx and Xxxxxxx
Mac loan limits as of the date of its origination, (xii) be secured by the same
property type as the Deleted Mortgage Loan, (xiii) have a lien priority equal to
or superior to that of the Deleted Mortgage Loan, (xiv) be covered by the PMI
Policy if the Deleted Mortgage Loan was covered by the PMI Policy, and (xv)
conform to each representation and warranty set forth in Section 6 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 (applied separately for the Group I
Mortgage Loans and Group II Mortgage Loans), the Mortgage Rates described in
clauses (ii) through (v) hereof shall be satisfied for each such mortgage loan,
the risk gradings described in clause (ix) hereof shall be satisfied as to each
such mortgage loan, the terms described in clause (vi) hereof shall be
determined on the basis of weighted average remaining term to maturity (provided
that no such mortgage loan may have a remaining term to maturity longer than the
Deleted Mortgage Loan), the Loan-to-Value Ratios described in clause (viii)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (xv) hereof must be satisfied as to each Qualified
Substitute Mortgage Loan or in the aggregate, as the case may be.
Notwithstanding the foregoing, if an amount of Mortgage Loans (measured by the
aggregate principal balance) that is in excess of 2.00% of the aggregate
principal balance of the Closing Date Mortgage Loans as of the Cut-Off Date has
previously been repurchased (exclusive of any Mortgage Loans purchased by the
Master Servicer pursuant to Section 3.16(c)) or substituted for, then in
addition to clauses (i) through (xiv) above, each Qualified Substitute Mortgage
Loan shall also have a Prepayment Charge provision at least as favorable to the
Holders of the related Class P Certificates as the Prepayment Charge provisions
in the Deleted Mortgage Loan.
"Rating Agency or Rating Agencies": Fitch, 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 recognized statistical rating agencies, or
other comparable Persons, designated by the Depositor, notice of which
designation shall be given to the Trustee and the Master Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the amount of
loss realized equal to the portion of the Principal Balance remaining unpaid
after application of all Net Liquidation Proceeds and Insurance Proceeds in
respect of such Mortgage Loan.
"Record Date": With respect to (i) the Class P Certificates, the Class C
Certificates, the Residual Certificates and any Definitive Certificates, the
Close of Business on the last Business Day of the calendar month preceding the
month in which the related Distribution Date occurs and (ii) with respect to the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates,
the Close of Business on the Business Day immediately preceding the related
43
Distribution Date; provided, however, that following the date on which
Definitive Certificates for a Class A Certificate, a Mezzanine Certificate or a
Class B Certificate are available pursuant to Section 5.02, the Record Date for
such Certificates shall be the last Business Day of the calendar month preceding
the month in which the related Distribution Date occurs.
"Recording Documents": As defined in Section 2.01 hereof.
"Reference Banks": Those banks (i) with an established place of business in
London, England, (ii) not controlling, under the control of or under common
control with the Depositor, the Seller or the Master Servicer or any affiliate
thereof and (iii) which have been designated as such by the Trustee with the
consent of the NIMS Insurer; provided, however, that if fewer than two of such
banks provide a LIBOR rate, then any leading banks selected by the Trustee with
the consent of the NIMS Insurer which are engaged in transactions in United
States dollar deposits in the international Eurocurrency market.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were not used
to purchase the related Mortgaged Property.
"Regular Certificates": The Class A Certificates, the Mezzanine Certificates,
the Class B Certificates, the Class C Certificates and the Class P Certificates.
"Relief Act": The Servicemembers' Civil Relief Act of 2003.
"Relief Act Interest Shortfall": With respect to any Distribution Date, for any
Mortgage Loan with respect to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended Due Period as a result
of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Mortgage
Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto, constituting a primary
trust created hereby and to be administered hereunder, with respect to which a
REMIC election is to be made consisting of: (i) such Mortgage Loans as from time
to time are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies, including the PMI Policy, required to be maintained pursuant
to this Agreement and any proceeds thereof, (iv) the Depositor's rights with
respect to the Mortgage Loans under the Mortgage Loan Purchase Agreement
(including any security interest created thereby) and (v) the Collection
Account, the Distribution Account (subject to the last sentence of this
definition) and any REO Account and such assets that are deposited therein from
time to time and any investments thereof, together with any and all income,
proceeds and payments with respect thereto. Notwithstanding the foregoing,
however, a REMIC election will not be made with respect to the Reserve Fund and
Master Servicer Prepayment Charge Payment Amounts.
44
"REMIC 1 Interest Loss Allocation Amount": With respect to any Distribution
Date, an amount equal to (a) the product of (i) 50% of the aggregate Principal
Balance of the Mortgage Loans and related REO Properties then outstanding and
(ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Overcollateralization Target Amount ": 0.50% of the
Overcollateralization Target Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date of determination,
(i) 0.50% of the aggregate Uncertificated Principal Balances of the REMIC 1
Regular Interest LT1-AA, REMIC 1 Regular Interest LT1-A1, REMIC 1 Regular
Interest LT1-A2, REMIC 1 Regular Interest LT1-A3, REMIC 1 Regular Interest
LT1-A4, REMIC 1 Regular Interest LT1-M1, REMIC 1 Regular Interest LT1-M2, REMIC
1 Regular Interest LT1-M3, REMIC 1 Regular Interest LT1-M4, REMIC 1 Regular
Interest LT1-M5, REMIC 1 Regular Interest LT1-M6, REMIC 1 Regular Interest
LT1-M7, REMIC 1 Regular Interest LT1-B, REMIC 1 Regular Interest LT1-ZZ and
REMIC 1 Regular Interest LT1-P minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1-A1, REMIC 1 Regular Interest
LT1-A2, REMIC 1 Regular Interest LT1-A3, REMIC 1 Regular Interest LT1-A4, REMIC
1 Regular Interest LT1-M1, REMIC 1 Regular Interest LT1-M2, REMIC 1 Regular
Interest LT1-M3, REMIC 1 Regular Interest LT1-M4, REMIC 1 Regular Interest
LT1-M5, REMIC 1 Regular Interest LT1-M6, REMIC 1 Regular Interest LT1-M7 and
REMIC 1 Regular Interest LT1-P, in each case as of such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any Distribution
Date, an amount equal to the product of (i) 0.50% of the aggregate Principal
Balance of the Mortgage Loans and REO Properties then outstanding and (ii) 1
minus a fraction, the numerator of which is 2 times the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1-A1, LT1-A2,
LT1-A3, LT1-A4, LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6 and LT1-M7 and
the denominator of which is the aggregate of the Uncertificated Principal
Balances of REMIC 1 Regular Interests LT1-A1, LT1-A2, LT1-A3, LT1-A4, LT1-M1,
LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7 and LT1-ZZ.
"REMIC 1 Regular Interest LT1-A1": 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 LT1-A1 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 LT1-A2": 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 LT1-A2 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.
45
"REMIC 1 Regular Interest LT1-A3": 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 LT1-A3 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 LT1-A4": 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 LT1-A4 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 LT1-AA": 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 LT1-AA 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 LT1-B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1-B shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
"REMIC 1 Regular Interest LT1-M1": 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 LT1-M1 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 LT1-M2": 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 LT1-M2 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 LT1-M3": 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 LT1-M3 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.
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"REMIC 1 Regular Interest LT1-M4": 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 LT1-M4 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 LT1-M5": 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 LT1-M5 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 LT1-M6": 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 LT1-M6 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 LT1-M7": 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 LT1-M7 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 LT1-P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any Prepayment Charges relating to the
Mortgage Loans collected by the Master Servicer and to a distribution of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1-ZZ": 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 LT1-ZZ 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 Interests": REMIC 1 Regular Interest LT1-AA, REMIC 1 Regular
Interest LT1-A1, REMIC 1 Regular Interest LT1-A2, REMIC 1 Regular Interest
LT1-A3, REMIC 1 Regular Interest LT1-A4, REMIC 1 Regular Interest LT1-M1, REMIC
1 Regular Interest LT1-M2, REMIC 1 Regular Interest LT1-M3, REMIC 1 Regular
Interest LT1-M4, REMIC 1 Regular Interest LT1-M5, REMIC 1 Regular Interest
LT1-M6, REMIC 1 Regular Interest LT1-M7, REMIC 1 Regular Interest LT1-B, REMIC 1
Regular Interest LT1-ZZ, REMIC 1 Regular Interest LT1-P, REMIC 1 Regular
47
Interest LT1-1SUB, REMIC 1 Regular Interest LT1-1GRP, REMIC 1 Regular Interest
LT1-2SUB, REMIC 1 Regular Interest LT1-2GRP, and REMIC 1 Regular Interest
LT1-XX.
"REMIC 1 Subordinated Ratio": With respect to any Distribution Date, the ratio
that (i) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans in a Loan Group as of that Distribution Date over (b) the
aggregate Certificate Principal Balance of the Class A Certificates related to
such Loan Group immediately prior to such Distribution Date, bears to (ii) the
aggregate Stated Principal Balance of the Mortgage Loans in the Loan Group as of
that Distribution Date.
"REMIC 2": The segregated pool of assets consisting of all of the REMIC 1
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates (other than the Class C Certificates and the
Class P Certificates), REMIC CX, as the holder of the Class C Interest, REMIC PX
as holder of the Class P Interest, and the Class R Certificateholders, as
holders of the Class R-2 Interest, pursuant to Article II hereunder, and all
amounts deposited therein, with respect to which a separate REMIC election is to
be made.
"REMIC 2 Regular Interests": The Class C Interest and the Class P Interest.
"REMIC CX": The segregated pool of assets consisting of the Class C Interest,
conveyed in trust to the Trustee, for the benefit of the Holders of the Class C
Certificates and the Class R-CX Certificates, pursuant to Article II hereunder,
and all amounts deposited therein, with respect to which a separate REMIC
election is to be made.
"REMIC 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 PX": The segregated pool of assets consisting of the Class P Interest,
conveyed in trust to the Trustee, for the benefit of the Holders of the Class P
Certificates and the Class R-PX Certificates, pursuant to Article II hereunder,
and all amounts deposited therein, with respect to which a separate REMIC
election is to be made.
"REMIC Regular Interests": The REMIC 1 Regular Interests and the REMIC 2 Regular
Interests.
"Remittance": As defined in Section 7.02(b) hereof.
"Remittance Report": A report prepared by the Master Servicer and delivered to
the NIMS Insurer and the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross income of
the character described in Section 856(d) of the Code.
48
"REO Account": The account or accounts maintained by the Master Servicer in
respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on behalf of
the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month during
which such REO Property was at any time part of the Trust Fund, one month's
interest at the applicable Net Mortgage Rate on the Principal Balance of such
REO Property (or, in the case of the first such calendar month, of the related
Mortgage Loan if appropriate) as of the Close of Business on the Distribution
Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any calendar
month, the excess, if any, of (a) the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form of
rental income, sale proceeds (including, without limitation, that portion of the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of
such REO Property or the related Mortgage Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Representative, in the
form of Exhibit E-1 or E-2 attached hereto.
"Reserve Fund": The reserve fund established pursuant to Section 3.26.
"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 0.03125%) of the
one-month United States dollar lending rates which banks in New York City
selected by the Trustee with the consent of the NIMS Insurer are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the 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 Trustee
with the consent of the NIMS Insurer are quoting on such Interest Determination
Date to leading European banks.
"Residential Dwelling": Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in a Xxxxxx Xxx eligible condominium project or a Xxxxxxx Mac
49
eligible condominium project, (iv) a manufactured home, or (v) a detached
one-family dwelling in a planned unit development, none of which is a
co-operative or mobile home.
"Residual Certificates": The Class R Certificates, the Class R-CX Certificates
and the Class R-PX Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC within
the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any managing
director, director, associate, principal, vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer 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, a division of The XxXxxx-Xxxx Companies, Inc., or its
successor in interest.
"Seller": Long Beach Mortgage Company, a Delaware corporation, or its successor
in interest, in its capacity as seller under the Mortgage Loan Purchase
Agreement.
"Servicing Account": The account or accounts created and maintained pursuant to
Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of pocket"
costs and expenses (including reasonable attorneys' fees and expenses) incurred
by the Master Servicer in the performance of its servicing obligations in
connection with a default, delinquencies or other unanticipated event or where
reimbursement is otherwise permitted in accordance with any of the terms of this
Agreement, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.14, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for any calendar month,
an amount equal to one month's interest (or in the event of any payment of
interest which accompanies a Principal Prepayment in full made by the Mortgagor
during such calendar month, interest for the number of days covered by such
payment of interest) at the Servicing Fee Rate on the same principal amount on
which interest on such Mortgage Loan accrues for such calendar month. A portion
of such Servicing Fee may be retained by any Sub-Servicer as its servicing
compensation.
"Servicing Fee Rate": 0.50% per annum.
"Servicing Representative": Any officer or employee of the Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing
representatives furnished by the Master Servicer to the Trustee and the
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Depositor on the Closing Date, as such list may from time to time be amended.
"Startup Day": As defined in Section 10.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as of any
date of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, the related Cut-off Date Principal Balance, as shown in
the Mortgage Loan Schedule, minus the sum of (i) the principal portion of each
Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the extent
received from the Mortgagor or advanced by the Master Servicer and distributed
pursuant to Section 4.01 on or before such date of determination, (ii) all
Principal Prepayments received after the Cut-off Date, to the extent distributed
pursuant to Section 4.01 on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds to the extent distributed pursuant
to Section 4.01 on or before such date of determination, and (iv) any Realized
Loss incurred with respect thereto as a result of a Deficient Valuation made
during or prior to the Due Period for the most recent Distribution Date
coinciding with or preceding such date of determination; and (b) as of any date
of determination coinciding with or subsequent to the Distribution Date on which
the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan
would be distributed, zero. With respect to any REO Property: (a) as of any date
of determination up to but not including the Distribution Date on which the
proceeds, if any, of a Liquidation Event with respect to such REO Property would
be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the aggregate amount of REO
Principal Amortization in respect of such REO Property for all previously ended
calendar months, to the extent distributed pursuant to Section 4.01 on or before
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.
"Stayed Funds": If the Master Servicer is the subject of a proceeding under the
federal Bankruptcy Code and the making of a Remittance (as defined in Section
7.02(b)) is prohibited by Section 362 of the federal Bankruptcy Code, funds that
are in the custody of the Master Servicer, a trustee in bankruptcy or a federal
bankruptcy court and should have been the subject of such Remittance absent such
prohibition.
"Stepdown Date": The earlier of (a) the later of (i) the Distribution Date in
June 2007 and (ii) 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 due on the related Due Date or received
during the related Prepayment Period but prior to distribution of the Principal
Distribution Amount in respect of the Certificates then entitled to
distributions of principal on such Distribution Date) is greater than or equal
to 34.70% and (b) the date on which the aggregate Certificate Principal Balance
of the Class A Certificates has been reduced to zero.
"Subordinate Cap Agreement": The interest rate cap agreement consisting of the
confirmation incorporating by reference the ISDA Master Agreement, dated April
20, 2004 between the Seller and the Cap Provider, as such agreement may be
amended and supplemented in accordance with its terms and any replacement
interest rate cap agreement acceptable to the Trustee.
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"Subordinated Net WAC Rate": For any Distribution Date and the Mezzanine
Certificates and the Class B Certificates, a per annum rate equal to (i) the
weighted average (weighted on the basis of Uncertificated Principal Balances) of
(a) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest
LT1-1SUB for such Distribution Date (with such rate subject to a cap and a floor
equal to the weighted average of the Adjusted Net Mortgage Rates of the Group I
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the Due Date in the month preceding such Distribution Date), and (b) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest LT1-2SUB
(with such rate subject to a cap and a floor equal to the weighted average of
the Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on the
basis of the Stated Principal Balances thereof as of the Due Date in the month
preceding such Distribution Date), (ii) multiplied by a fraction the numerator
of which is 30 and the denominator of which is the actual number of days elapsed
in the related Accrual Period.
"Sub-Servicer": Any Person with which the Master Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer
pursuant to Section 3.02.
"Sub-Servicing Account": An account or accounts established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the applicable Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master Servicer and
a Sub-Servicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02.
"Subsequent Recoveries": The Gross Subsequent Recoveries net of amounts payable
or reimbursable to the Master Servicer for related (i) Advances, (ii) Servicing
Advances and (iii) Servicing Fees.
"Substitution Adjustments": As defined in Section 2.03(d) hereof.
"Tax Returns": The federal income tax return on Internal Revenue Service Form
1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holder of
the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be
filed by the Trustee on behalf of each REMIC, together with any and all other
information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display designated as page "3750" on the Dow Xxxxx
Telerate Capital Markets Report (or such other page as may replace page 3750 on
that report for the purpose of displaying London interbank offered rates of
major banks).
"Termination Price": As defined in Section 9.01(a) hereof.
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"Terminator": As defined in Section 9.01.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation, or
other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership Interest in
a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership Interest
in a Certificate.
"Trigger Event": A Trigger Event has occurred with respect to a Distribution
Date if either a Cumulative Loss Trigger Event or a Delinquency Trigger Event
has occurred with respect to such Distribution Date.
"Trust": Long Beach Mortgage Loan Trust 2004-2, the trust created hereunder.
"Trust Fund": All of the assets of the Trust, which is the trust created
hereunder consisting of REMIC 1, REMIC 2, REMIC CX, REMIC PX, the Reserve Fund
and any Master Servicer Prepayment Charge Payment Amounts and the Trust's rights
under each of the Cap Agreements.
"Trust REMIC": Any of REMIC 1, REMIC 2, REMIC CX and/or REMIC PX.
"Trustee": Deutsche Bank National Trust Company, a national banking association,
or its successor in interest, or any successor trustee appointed as herein
provided.
"Trustee Fee": With respect to each Distribution Date, one-twelfth of the
Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (prior to giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period).
"Trustee Fee Rate": 0.00135% per annum.
"Uncertificated Accrued Interest": With respect to each REMIC Regular Interest
on each Distribution Date, an amount equal to one month's interest at the
related Uncertificated Pass-Through Rate on the Uncertificated Principal Balance
or Uncertificated Notional Amount of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Net Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls allocated to such REMIC Regular
Interests pursuant to Section 1.03.
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"Uncertificated Principal Balance": With respect to each REMIC Regular Interest,
the principal amount of such REMIC Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.05 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses and increased by Subsequent Recoveries as
provided in Section 4.06, and the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1-ZZ shall be increased by interest deferrals as provided in
Section 4.05. The Uncertificated Principal Balance of each REMIC Regular
Interest that has an Uncertificated Principal Balance shall never be less than
zero. Notwithstanding the foregoing, the Uncertificated Principal Balance of (i)
the Class C Interest shall always be equal to the excess, if any, of (A) the
then aggregate Uncertificated Principal Balances of the REMIC 1 Regular
Interests over (B) the sum of the Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
P Interest.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to any Distribution
Date and REMIC 1 Regular Interest LT1-AA, REMIC 1 Regular Interest LT1-A1, REMIC
1 Regular Interest LT1-A2, REMIC 1 Regular Interest LT1-A3, REMIC 1 Regular
Interest LT1-A4, REMIC 1 Regular Interest LT1-M1, REMIC 1 Regular Interest
LT1-M2, REMIC 1 Regular Interest LT1-M3, REMIC 1 Regular Interest LT1-M4, REMIC
1 Regular Interest LT1-M5, REMIC 1 Regular Interest LT1-M6, REMIC 1 Regular
Interest LT1-M7, REMIC 1 Regular Interest LT1-B, REMIC 1 Regular Interest
LT1-1SUB, REMIC 1 Regular Interest LT1-2SUB, and REMIC 1 Regular Interest
LT1-XX, a per annum rate equal to the weighted average of the Adjusted Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances of such Mortgage Loans as of the Due Date in the month
preceding the month of such Distribution Date.
With respect to any Distribution Date and REMIC Regular Interest LT1-1GRP, a per
annum rate equal to the weighted average of the Adjusted Net Mortgage Rates of
the Group I Mortgage Loans, weighted on the basis of the Stated Principal
Balances of such Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date.
With respect to any Distribution Date and REMIC Regular Interest LT1-2GRP, a per
annum rate equal to the weighted average of the Adjusted Net Mortgage Rates of
the Group II Mortgage Loans, weighted on the basis of the Stated Principal
Balances of such Mortgage Loans as of the Due Date in the month preceding the
month of such Distribution Date.
"Undercollateralized Amount": With respect to any Distribution Date, the amount,
if any, by which (i) the sum of the aggregate Certificate Principal Balances of
the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates and the Uncertificated Principal Balance of the Class P Interest as
of such Distribution Date (after giving effect to distributions to be made on
such Distribution Date) exceeds (ii) the aggregate Stated Principal Balance of
the Mortgage Loans on the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period).
"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.
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"United States Person" or "U.S. Person": (i) A citizen or resident of the United
States; (ii) a corporation, partnership or other entity classified as a
corporation or partnership for United States federal income tax purposes created
or organized in, or under the laws of, the United States or any political
subdivision thereof (except, in the case of a partnership or entity treated as a
partnership, to the extent provided in regulations) provided that, solely for
purposes of the restrictions on the transfer of the Residual Certificates, no
partnership or other entity treated as a partnership shall be treated as a
United States Person unless all persons that own an interest in such partnership
or other entity, either directly or through any entity that is not a corporation
for United States federal income tax purposes, are required by the applicable
operative agreement to be United States Persons; (iii) an estate the income of
which is subject to United States federal income taxation regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States Persons have the authority to control all substantial decisions of the
trust or if the trust was in existence on August 20, 1996, was treated as a
United States Person on August 19, 1996, and made a valid election to continue
to be treated as a United States Person. The term "United States" shall have the
meaning set forth in Section 7701 of the Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates and (i) the first
Distribution Date, zero, and (ii) any Distribution Date after the first
Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly
Interest Distributable Amount for such Class of Certificates for the immediately
preceding Distribution Date and (2) the outstanding Unpaid Interest Shortfall
Amount, if any, for such Class of Certificates for such preceding Distribution
Date exceeds (b) the aggregate amount distributed on such Class of Certificates
in respect of interest pursuant to clause (a) of this definition on such
preceding Distribution Date, plus interest on the amount of interest due but not
paid on such Class of Certificates on such preceding Distribution Date, to the
extent permitted by law, at the Pass-Through Rate for such Class of Certificates
for the related Accrual Period.
"Value": With respect to any Mortgaged Property, the lesser of (i) the value
thereof as determined by an appraisal made for the originator of the Mortgage
Loan at the time of origination of the Mortgage Loan by an appraiser who met the
minimum requirements of Xxxxxx Xxx, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of Xxxxxx Mae.
"Voting Rights": The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. At all times the Class A Certificates,
the Mezzanine Certificates, the Class B Certificates and the Class C
Certificates shall have 98% of the Voting Rights (allocated among the Holders of
the Class A Certificates, the Mezzanine Certificates, the Class B Certificates
and the Class C Certificates in proportion to the then outstanding Certificate
Principal Balances of their respective Certificates), the Class P Certificates
shall have 1% of the Voting Rights and the Class R Certificates shall have 1% of
the Voting Rights, provided that, if and for so long as the Class C Certificates
and the Class P Certificates are held by one or more foreign entities and serve
55
as collateral for the NIM Notes, the total combined voting power of such Classes
of Certificates shall not exceed 9.9%. The Voting Rights allocated to any Class
of Certificates (other than the Class P Certificates and the Class R
Certificates) shall be allocated among all Holders of each such Class in
proportion to the outstanding Certificate Principal Balance of such Certificates
and the Voting Rights allocated to the Class P Certificates and the Class R
Certificates shall be allocated among all Holders of each such Class in
proportion to such Holders' respective Percentage Interest; provided, however,
that when none of the Regular Certificates are outstanding, 100% of the Voting
Rights shall be allocated among Holders of the Class R Certificates in
accordance with such Holders' respective Percentage Interests in the
Certificates of such Class. The Class R-CX Certificates and the Class R-PX
Certificates shall not have Voting Rights.
"Washington Mutual Custodian": None of the Mortgage Loans are held by the
Washington Mutual Custodian as custodian. References to the Washington Mutual
Custodian are left in this Agreement for administrative convenience and shall be
completely disregarded. There is no Washington Mutual Custodian under this
Agreement and no Person shall have any rights of the Washington Mutual Custodian
under this Agreement.
"Washington Mutual Mortgage Loans": The Mortgage Loans acquired by the Seller
from Washington Mutual Bank, Washington Mutual Bank, FA, Washington Mutual Bank
fsb, or from any of their subsidiaries.
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 Mezzanine Certificates, the Class B
Certificates and the Class C Interest for any Distribution Date, the aggregate
amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date
shall be allocated first to the Class C Interest to the extent of one month's
interest at the then applicable Pass-Through Rate on the Notional Amount of such
Regular Interest, and then among the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates on a pro rata basis based on, and to
the extent of, interest for the related Accrual Period at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance of
each such Certificate.
For purposes of calculating the amount of the Monthly Interest Distributable
Amount for the Class C Certificates for any Distribution Date, the aggregate
amount of any Net Prepayment Interest Shortfalls and any Relief Act Interest
Shortfalls allocated to the Class C Interest pursuant to the paragraph above
shall be allocated among the Class C Certificates on a pro rata basis based on
one month's interest.
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For purposes of calculating the amount of Uncertificated Accrued Interest for
the REMIC 1 Regular Interests for any Distribution Date:
(a) 50% of any Net Prepayment Interest and Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated to REMIC 1 Regular Interest LT1-AA and REMIC 1 Regular Interest LT1-ZZ
up to an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount,
98% and 2%, respectively, and thereafter among REMIC 1 Regular Interest LT1-AA,
REMIC 1 Regular Interest LT1-A1, REMIC 1 Regular Interest LT1-A2, REMIC 1
Regular Interest LT1-A3, REMIC 1 Regular Interest LT1-A4, REMIC 1 Regular
Interest LT1-M1, REMIC 1 Regular Interest LT1-M2, REMIC 1 Regular Interest
LT1-M3, REMIC 1 Regular Interest LT1-M4, REMIC 1 Regular Interest LT1-M5, REMIC
1 Regular Interest LT1-M6, REMIC 1 Regular Interest LT1-M7, REMIC 1 Regular
Interest LT1-B, REMIC 1 Regular Interest LT1-ZZ and REMIC 1 Regular Interest
LT1-P, pro rata based on, and to the extent of, one month's interest at the then
applicable respective Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC 1 Regular Interest; and
(b) 50% of any Net Prepayment Interest and Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated to REMIC 1 Regular Interest LT1-1SUB, REMIC 1 Regular Interest
LT1-1GRP, REMIC 1 Regular Interest LT1-2SUB, REMIC 1 Regular Interest LT1-2GRP,
and REMIC 1 Regular Interest LT1-XX, pro rata based on, and to the extent of,
one month's interest at the then applicable respective Pass-Through Rate on the
respective Uncertificated Principal Balance of each such REMIC 1 Regular
Interest.
Section 1.04 Rights of the NIMS Insurer.
(a) Each of the rights of the NIMS Insurer set forth in this Agreement shall
exist so long as the Insured NIM Notes remain outstanding; provided, however,
the NIMS Insurer shall not have any rights hereunder (except as provided in
Section 9.01) so long as any NIMS Insurer Default is continuing.
(b) Notwithstanding anything to the contrary anywhere in this Agreement, all
rights and benefits of the NIMS Insurer hereunder shall permanently terminate
upon such time as the Insured NIM Notes shall no longer be outstanding.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee without recourse
for the benefit of the Certificateholders all the right, title and interest of
the Depositor, including any security interest therein for the benefit of the
Depositor, in and to the Mortgage Loans identified on the Mortgage Loan
Schedule, the rights of the Depositor under the Mortgage Loan Purchase Agreement
57
(other than the Depositor's rights under Section 17 thereof), the rights of the
Depositor under each of the Cap Agreements, and all other assets included or to
be included in REMIC 1. Such assignment includes all scheduled payments on the
Mortgage Loans due after the Cut-off Date and all unscheduled collections in
respect of the Mortgage Loans received after April 1, 2004 (other than the
portion of such collections due on or prior to the Cut-off Date). The Depositor
herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase
Agreement, each of the Cap Agreements, the Cap Assignment and the PMI Policy.
If the assignment and transfer of the Mortgage Loans and the other property
specified in Section 2.01 from the Depositor to the Trustee pursuant to this
Agreement is held or deemed not to be a sale or is held or deemed to be a pledge
of security for a loan, the Depositor intends that the rights and obligations of
the parties shall be established pursuant to the terms of this Agreement and
that, in such event, (i) the Depositor shall be deemed to have granted and does
hereby grant to the Trustee as of the Closing Date a perfected, first priority
security interest in the entire right, title and interest of the Depositor in
and to the Mortgage Loans and all other property conveyed to the Trust Fund
pursuant to this Section 2.01 and all proceeds thereof and (ii) this Agreement
shall constitute a security agreement under applicable law.
In connection with such transfer and assignment, the Depositor does hereby
deliver to, and deposit with, the Trustee as custodian (in which capacity it
will, unless otherwise specified, be acting under this Article II) the following
documents or instruments with respect to each Mortgage Loan so transferred and
assigned (with respect to each Mortgage Loan, a "Mortgage File"):
(a) the original Mortgage Note, endorsed in blank or in the following form: "Pay
to the order of Deutsche Bank National Trust Company, as Trustee under the
applicable agreement, without recourse," with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee or (in the case of not more than 1.00% of the
Mortgage Loans, by aggregate principal balance as of the Cut-off Date) a copy of
such original Mortgage Note with an accompanying Lost Note Affidavit executed by
the Seller;
(b) the original Mortgage with evidence of recording thereon, and a copy,
certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete chain of
assignment from the originator to the Person assigning the Mortgage to the
Trustee or in blank;
(e) the original or copies of each assumption, modification, written assurance
or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all endorsements
or riders issued with or subsequent to the issuance of such policy (or a copy of
the above, in the case of the Washington Mutual Mortgage Loans), insuring the
priority of the Mortgage as a first lien on the Mortgaged Property represented
therein as a fee interest vested in the Mortgagor, or in the event such title
policy is unavailable, a written commitment or uniform binder or preliminary
58
report of title issued by the title insurance or escrow company.
The Master Servicer, in its capacity as Seller, shall promptly (and in no event
later than thirty (30) Business Days, subject to extension upon a mutual
agreement between the Master Servicer and the Trustee), following the later of
the Closing Date and the date of receipt by the Master Servicer of the recording
information for a Mortgage submit or cause to be submitted for recording, at no
expense to the Trust Fund, the Trustee or the Depositor, in the appropriate
public office for real property records, each Assignment referred to in Sections
2.01(c) and (d) above and shall execute each original Assignment referred to in
clause (c) above in the following form: "Deutsche Bank National Trust Company,
as Trustee under applicable agreement, without recourse." In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Master Servicer, in its capacity as Seller, shall promptly prepare or cause to
be prepared a substitute Assignment or cure or cause to be cured such defect, as
the case may be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding the foregoing, the Assignments shall not be required to be
completed and submitted for recording with respect to any Mortgage Loan if each
Rating Agency does not require recordation in order for such Rating Agency to
assign the initial ratings to the Class A Certificates, the Mezzanine
Certificates, the Class B Certificates and the Other NIM Notes and the initial
shadow rating to the Insured NIM Notes, without giving effect to any insurance
policy issued by the NIMS Insurer; provided, however, each Assignment shall be
submitted for recording by the Master Servicer, in its capacity as Seller, in
the manner described above, at no expense to the Trust Fund or the Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Default, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer
as described in Section 7.02 hereof and (v) if the Seller is not the Master
Servicer and with respect to any one Assignment, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments, such expense shall be paid by the Trustee and
shall be reimbursable to the Trustee as an Extraordinary Trust Fund Expense.
If any of the documents referred to in Sections 2.01(b), (c), (d) or (e) above
(collectively, the "Recording Documents") has as of the Closing Date been
submitted for recording but either (x) has not been returned from the applicable
public recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the Master Servicer,
in its capacity as the Seller, to deliver such Recording Documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the applicable
Custodian of a copy of each such Recording Document certified by the Seller in
the case of (x) above or the applicable public recording office in the case of
(y) above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee or the applicable Custodian promptly upon receipt thereof, and in any
event no later than one year after the Closing Date, of either the original or a
copy of such Recording Document certified by the applicable public recording
office to be a true and complete copy of the original. In instances where, due
to a delay on the part of the recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents cannot be
delivered to the Trustee or the applicable Custodian within one year after the
Closing Date, the Master Servicer, in its capacity as the Seller, shall deliver
to the Trustee or the applicable Custodian within such time period an Officer's
Certificate stating the date by which the Master Servicer, in its capacity as
the Seller, expects to receive such Recording Documents from the applicable
recording office. In the event that Recording Documents have still not been
received by the Master Servicer, in its capacity as the Seller, and delivered to
the Trustee or the applicable Custodian by the date specified in its previous
Officer's Certificate delivered to the Trustee or the applicable Custodian, as
the case may be, the Master Servicer, in its capacity as the Seller, shall
deliver to the Trustee or the applicable Custodian by such date an additional
Officer's Certificate stating a revised date by which the Master Servicer, in
its capacity as the Seller, expects to receive the applicable Recording
Documents. This procedure shall be repeated until the Recording Documents have
been received by the Master Servicer, in its capacity as the Seller, and
delivered to the Trustee or the applicable Custodian. If the original lender's
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title insurance policy (or a copy thereof, in the case of the Washington Mutual
Mortgage Loans) was not delivered pursuant to Section 2.01(f) above, the Master
Servicer, in its capacity as the Seller, shall deliver or cause to be delivered
to the Trustee or the applicable Custodian promptly after receipt thereof, and
in any event within 120 days after the Closing Date, the original lender's title
insurance policy (or a copy thereof, in the case of the Washington Mutual
Mortgage Loans). The Master Servicer, in its capacity as the Seller, shall
deliver or cause to be delivered to the Trustee or the applicable Custodian
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not delivered to
the Trustee or the applicable Custodian are and shall be held by or on behalf of
the Seller, the Depositor or the Master Servicer, as the case may be, in trust
for the benefit of the Trustee on behalf of the Certificateholders. In the event
that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Trustee or the applicable Custodian. Any such original document
delivered to or held by the Depositor that is not required pursuant to the terms
of this Section to be a part of a Mortgage File, shall be delivered promptly to
the Master Servicer.
The Mortgage Loans permitted by the terms of this Agreement to be included in
the Trust are limited to (i) the Mortgage Loans (which the Depositor acquired
pursuant to the Mortgage Loan Purchase Agreement, which contains, among other
representations and warranties, a representation and warranty of the Seller that
no Mortgage Loan is a "high-cost" or "predatory" loan under any state or local
law or regulation applicable to the originator), and (ii) Qualified Substitute
Mortgage Loans (which, by definition as set forth herein and referred to in the
Mortgage Loan Purchase Agreement, are required to conform to, among other
representations and warranties, the representation and warranty of the Seller
that no Qualified Substitute Mortgage Loan is a "high cost" or "predatory" loan
under any state or local law or regulation applicable to the originator). It is
agreed and understood by the parties hereto that it is not intended that any
mortgage loan be included in the Trust that is a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003 or a
"High Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004.
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Section 2.02 Acceptance of REMIC 1 by the Trustee.
Subject to the provisions of Section 2.01 and subject to any exceptions noted on
the exception report described in the next paragraph below, the Trustee or a
Custodian on behalf of the Trustee, as applicable, acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "REMIC 1" under clauses (i), (iii), (iv) and (vi) (to the extent
of amounts deposited into the Distribution Account) and declares that it holds
and will hold such documents and the other documents delivered to it
constituting the Mortgage File, and all such assets and such other assets
included in the definition of "REMIC 1" in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee or the Custodian, as applicable, agrees, for the benefit of the
Certificateholders, to review each Mortgage File on or before the Closing Date,
with respect to each Mortgage Loan and to certify to the Trustee, the NIMS
Insurer, the Depositor and the Master Servicer in substantially the form
attached hereto as Exhibit F-1 that, as to each Closing Date Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), (i) all documents
constituting part of such Mortgage File (other than such documents described in
Section 2.01(e)) required to be delivered to it pursuant to this Agreement are
in its possession, (ii) such documents have been reviewed by the Trustee or the
Washington Mutual Custodian, as applicable and are not mutilated, torn or
defaced unless initialed by the related borrower and relate to such Mortgage
Loan and (iii) based on the Trustee's examination and only as to the foregoing,
the information set forth in the Mortgage Loan Schedule that corresponds to
items (i), (ii), (ix), (xii), (xiv) (to the extent of the Periodic Rate Cap for
the first Adjustment Date and subsequent Adjustment Dates) and (xvi) of the
definition of "Mortgage Loan Schedule" accurately reflects information set forth
in the Mortgage File. It is herein acknowledged that, in conducting such review,
neither the Trustee nor any Custodian is under any duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose (including with respect to Section 2.01(f), whether
such title insurance policy (a) contains all necessary endorsements, (b) insures
the priority of the Mortgage as a first lien or (c) whether the interest vested
in the Mortgagor is a fee interest) or whether they have actually been recorded
or that they are other than what they purport to be on their face or (ii) to
determine whether any Mortgage File should include any of the documents
specified in clause (e) of Section 2.01.
Prior to the first anniversary date of this Agreement, the Trustee shall deliver
(or, with respect to the Mortgage Loans held by another Custodian, such
Custodian shall deliver) to the Depositor, the Master Servicer and the NIMS
Insurer a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or preparing, as
the case may be, the certifications referred to above, the Trustee holding such
Mortgage Files or any Custodian holding such Mortgage Files finds any document
or documents constituting a part of a Mortgage File to be missing or defective
in any material respect, at the conclusion of its review the Trustee shall so
notify or such other Custodian shall notify the Depositor, the Seller, the NIMS
Insurer and the Master Servicer. In addition, upon the discovery by the
Depositor, the Master Servicer or the Trustee of a breach of any of the
representations and warranties made by the Seller in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially and adversely affects
61
the value of such Mortgage Loan or the interests of the related
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties.
Section 2.03 Cure, Repurchase or Substitution of Mortgage Loans by the Seller;
Remedies for Breaches by Depositor or Master Servicer; Remedies for Breaches
Relating to Prepayment Charges.
(a) Upon discovery or receipt of notice of any materially defective document in,
or that a document is missing from, the Mortgage File or of the breach by the
Seller of any representation, warranty or covenant under the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan which materially and
adversely affects the value of such Mortgage Loan or the interest therein of the
Certificateholders (it being understood that (i) in the case of any such
representation or warranty made to the knowledge or the best of knowledge of the
Seller, as to which the Seller has no knowledge, without regard to the Seller's
lack of knowledge with respect to the substance of such representation or
warranty being inaccurate at the time it was made and (ii) with respect to the
representation and warranty set forth in Section 6(xlvi) of the Mortgage Loan
Purchase Agreement, a breach of any such representation or warranty shall in and
of itself be deemed to materially and adversely affect the interest of the
Certificateholders in the related Mortgage Loan), the Trustee shall promptly
notify the Depositor, the Seller, the NIMS Insurer and the Master Servicer of
such defect, missing document or breach and request that the Seller deliver such
missing document or cure such defect or breach within 90 days from the date the
Seller was notified of such missing document, defect or breach (except as
described in Section 2.03(e)), and if the Seller does not deliver such missing
document or cure such defect or breach in all material respects during such
period, the Master Servicer (or, in accordance with Section 3.02(b), the
Trustee) shall enforce the obligations of the Seller under the Mortgage Loan
Purchase Agreement to repurchase such Mortgage Loan from REMIC 1 at the Purchase
Price within 90 days after the date on which the Seller was notified (subject to
Section 2.03(e)) of such missing document, defect or breach, if and to the
extent that the Seller is obligated to do so under the Mortgage Loan Purchase
Agreement. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee or a Custodian, as
applicable, upon receipt of written certification from the Master Servicer of
such deposit, shall release to the Seller the related Mortgage File, and the
Trustee or a Custodian on behalf of the Trustee, as applicable, shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Seller shall furnish to it or such Custodian, as applicable,
and as shall be necessary to vest in the Seller any Mortgage Loan released
pursuant hereto, and neither the Trustee nor any Custodian shall have any
further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, if so provided in the
Mortgage Loan Purchase Agreement, the Seller may cause such Mortgage Loan to be
removed from REMIC 1 (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood and
agreed that the obligation of the Seller to cure or to repurchase (or to
substitute for) any Mortgage Loan as to which a document is missing, a material
defect in a constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
omission, defect or breach available to the Certificateholders, the Trustee on
behalf of the Certificateholders, and the NIMS Insurer.
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(b) Within 90 days of the earlier of discovery by the Depositor or receipt of
notice by the Depositor of the breach of any representation or warranty of the
Depositor set forth in Section 2.05 with respect to any Mortgage Loan, which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Depositor shall cure such breach in all
material respects.
(c) As promptly as practicable (and no later than 90 days) after the earlier of
discovery by the Master Servicer or receipt of notice by the Master Servicer of
the breach of any representation, warranty or covenant of the Master Servicer
set forth in Section 2.04 which materially and adversely affects the value of
any Mortgage Loan or the interests of the Certificateholders in any Mortgage
Loan, the Master Servicer shall cure such breach in all material respects.
Within 90 days of the earlier of discovery by the Master Servicer or receipt of
notice by the Master Servicer of the breach of any representation, warranty or
covenant of the Master Servicer set forth in Section 2.04(a)(vii) or (viii)
which materially and adversely affects the interests of the Holders of the Class
P Certificates to any Prepayment Charge, the Master Servicer shall cure such
breach in all material respects. If the representation made by the Master
Servicer in its capacity as Seller in Section 2.04(a)(vii) is breached, the
Master Servicer in its capacity as Seller shall pay into the Collection Account
the amount of the scheduled Prepayment Charge, less any amount previously
collected and deposited by, or paid by, the Master Servicer into the Collection
Account; and if the covenant made by the Master Servicer in Section
2.04(a)(viii) is breached, the Master Servicer shall pay into the Collection
Account the amount of the waived Prepayment Charge.
(d) Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage
Loans made pursuant to Section 2.03(a) shall be effected prior to the date which
is two years after the Startup Date for REMIC 1.
As to any Deleted Mortgage Loan for which the Seller substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Seller delivering to the Trustee (or, with respect to the Mortgage Loans held by
another Custodian, to such Custodian) on behalf of the Trustee, for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage,
the Assignment to the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with
an Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution
Adjustments (as described below), if any, in connection with such substitution.
The Trustee shall acknowledge or with respect to the Mortgage Loans held by
another Custodian such other Custodian shall acknowledge receipt for such
Qualified Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, review such documents as specified in Section 2.02 and deliver to
the Depositor, the Master Servicer and the NIMS Insurer, 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
or with respect to the Mortgage Loans held by another Custodian, such other
Custodian shall deliver to the Depositor, the Seller, the NIMS Insurer and the
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Master Servicer a certification substantially in the form of Exhibit F-2 hereto
with respect to such Qualified Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC 1 and will be retained by the Seller. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan on or before the Due Date in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Trustee shall give or
cause to be given written notice to the NIMS Insurer and the Certificateholders
that such substitution has taken place, and the Master Servicer shall amend or
cause to be amended the Mortgage Loan Schedule and, if applicable, the
Prepayment Charge 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 and, if applicable, the Prepayment Charge Schedule to the
NIMS Insurer and the Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and the Mortgage Loan
Purchase Agreement, including all applicable representations and warranties
thereof included in the Mortgage Loan Purchase Agreement as of the date of
substitution.
For any month in which the Seller substitutes one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amounts (the "Substitution Adjustments"), if any, by which the
aggregate Purchase Price of all such Deleted Mortgage Loans in Loan Group I or
Loan Group II, respectively, exceeds the aggregate of the Stated Principal
Balance of the Qualified Substitute Mortgage Loans that will become part of Loan
Group I or Loan Group II, respectively, as of the date of substitution, together
with one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding Advances and Servicing Advances with respect
to such Deleted Mortgage Loan. On the date of such substitution, the Seller will
deliver or cause to be delivered to the Master Servicer for deposit in the
Collection Account an amount equal to the sum of Substitution Adjustments, if
any (which for federal income tax purposes will be treated as payment for the
repurchase of that portion of the Deleted Mortgage Loans), and the Trustee, upon
receipt of the related Qualified Substitute Mortgage Loan or Loans (or
acknowledgement of such receipt by another Custodian) and certification by the
Master Servicer of such deposit, shall release or, if such Mortgage File is held
by another Custodian, such Custodian shall release to the Seller the related
Mortgage File or Files and the Trustee shall execute and deliver or, if such
Mortgage File is held by another Custodian, such Custodian shall execute and
deliver such instruments of transfer or assignment, without recourse, as the
Seller shall deliver to it or such Custodian, as applicable, and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Master Servicer in its capacity as Seller shall obtain at its
own expense and deliver to the NIMS Insurer and the Trustee an Opinion of
Counsel to the effect that such substitution will not cause (a) any federal tax
to be imposed on REMIC 1, created hereunder, including without limitation, any
federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of the
Code or on contributions after the startup day under Section 860G(d)(1) of the
Code, or (b) any Trust REMIC hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding.
(e) Upon discovery by the Depositor, the Seller, the Master Servicer 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
64
shall within two Business Days give written notice thereof to the other parties.
In connection therewith, the Master Servicer in its capacity as Seller shall
repurchase or, subject to the limitations set forth in Section 2.03(d),
substitute one or more Qualified Substitute Mortgage Loans for the affected
Mortgage Loan within 90 days of the earlier of discovery or receipt of such
notice with respect to such affected Mortgage Loan. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 2.03(a)
and Section 2.03(d). The Trustee shall reconvey to the Seller the Mortgage Loan
to be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Section 2.04 Representations, Warranties and Covenants of the Master Servicer.
(a) The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of the Trustee and the Certificateholders, and to the
Depositor, that as of the Closing Date or as of such date specifically provided
herein:
(i) The Master Servicer is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, is duly
authorized and qualified to transact any and all business contemplated by this
Agreement and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in the states where
the Mortgaged Properties are located if the laws of such state require licensing
or qualification in order to conduct business of the type conducted by the
Master Servicer or to ensure the enforceability or validity of each Mortgage
Loan and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure its ability to enforce each
Mortgage Loan and to service the Mortgage Loans in accordance with the terms of
this Agreement;
(ii) The Master Servicer has the full power and authority to service each
Mortgage Loan, to execute, deliver and perform, and to enter into and consummate
the transactions contemplated by this Agreement and has duly authorized by all
necessary action on the part of the Master Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Depositor and the Trustee,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against the Master Servicer in accordance with its terms, except to
the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The execution and delivery of this Agreement by the Master Servicer, the
servicing of the Mortgage Loans by the Master Servicer hereunder, the
consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of the charter or by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
65
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties or
assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing and is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that would materially
and adversely affect the execution, delivery or enforceability of this Agreement
or the ability of the Master Servicer to service the Mortgage Loans or to
perform any of its other obligations hereunder in accordance with the terms
hereof;
(vi) No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Master Servicer of, or compliance by the Master Servicer with, this Agreement or
the consummation by the Master Servicer of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations or orders, if
any, that have been obtained prior to the Closing Date;
(vii) The information set forth in the Prepayment Charge Schedule is complete,
true and correct in all material respects at the date or dates respecting which
such information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable law upon the
Mortgagor's voluntary principal prepayment (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary prepayment); provided that the
representation, warranty and covenant contained in this clause (vii) is made by
the Master Servicer only in its capacity as Seller; and
(viii) The Master Servicer will not waive any Prepayment Charge or part of a
Prepayment Charge unless such waiver is related to a default or a reasonably
foreseeable default and would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and related Mortgage Loan and doing
66
so is standard and customary in servicing mortgage loans similar to the Mortgage
Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default).
(ix) With respect to each Mortgage Loan, the Master Servicer will furnish, or
cause to be furnished, information regarding the borrower credit file related to
such Mortgage Loan to credit reporting agencies in compliance with the
provisions of the Fair Credit Reporting Act and the applicable implementing
regulations. The Master Servicer will transmit full-file credit reporting data
for each Mortgage Loan pursuant to Xxxxxx Mae Guide Announcement 95-19 and that
for each Mortgage Loan, the Master Servicer agrees it shall report one of the
following statuses each month as follows: new origination, current, delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off.
(b) It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee or a Custodian, as the case may be, and shall inure to the
benefit of the Trustee, the Depositor and the Certificateholders. Upon discovery
by any of the Depositor, the Master 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 other of such parties. The obligation of the
Master Servicer set forth in Section 2.03(c) to cure breaches (or, in the case
of (a)(vii) or (a)(viii) above, to pay a Master Servicer Prepayment Charge
Payment Amount) shall constitute the sole remedy against the Master Servicer
available to the Certificateholders, the Depositor, the NIMS Insurer or the
Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.04. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor, the NIMS Insurer or the Trustee on behalf of
the Certificateholders, (i) pursuant to the Mortgage Loan Purchase Agreement
signed by the Master Servicer in its capacity as Seller, respecting a breach of
the representations, warranties and covenants of the Master Servicer in its
capacity as Seller contained in the Mortgage Loan Purchase Agreement or (ii)
pursuant to Section 7.01 hereof.
Section 2.05 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Trustee, for the
benefit of the Trustee and the Certificateholders, and to the Master Servicer,
that as of the Closing Date or as of such date specifically provided herein:
(i) Each of this Agreement and the Mortgage Loan Purchase Agreement constitutes
a legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors'
67
rights in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the Depositor to the
Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had good and
marketable title to each Mortgage Loan subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature. Immediately prior to the assignment
of each of the Cap Agreements to the Trustee on behalf of the Trust, the
Depositor had good title to, and was the sole legal and beneficial owner of,
each of the Cap Agreements, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind created by the
Depositor, and has full right and authority, subject to no interest or
participation of, or agreement with, any other party to sell and assign the
same. Upon the delivery, transfer or assignment of each of the Cap Agreements to
the Trustee on behalf of the Trust as contemplated herein, the Trustee on behalf
of the Trust, will receive each of the Cap Agreements, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind created by the Depositor;
(iii) As of the Closing Date, the Depositor has transferred all of its right,
title and interest in the Mortgage Loans and each of the Cap Agreements to the
Trustee on behalf of the Trust;
(iv) The Depositor is solvent and will not be made insolvent by the transfer of
the Mortgage Loans. The Depositor has not transferred the Mortgage Loans to the
Trustee with any intent to hinder, delay or defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with full corporate
power and authority to own its assets and conduct its business as presently
being conducted;
(vi) The Depositor is not in violation of its articles of incorporation or
by-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be bound, which
default might result in any material adverse changes in the financial condition,
earnings, affairs or business of the Depositor or which might materially and
adversely affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement and the Mortgage
Loan Purchase Agreement by the Depositor, and the consummation of the
transactions contemplated hereby and thereby, do not and will not result in a
material breach or violation of any of the terms or provisions of, or, to the
knowledge of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Depositor is a party or by which the Depositor is bound or to which any of the
property or assets of the Depositor is subject, nor will such actions result in
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any violation of the provisions of the articles of incorporation or by-laws of
the Depositor or, to the best of the Depositor's knowledge without independent
investigation, any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Depositor or any of its
properties or assets (except for such conflicts, breaches, violations and
defaults as would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement or the Mortgage Loan
Purchase Agreement);
(viii) To the best of the Depositor's knowledge without any independent
investigation, no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the United
States or any other jurisdiction is required for the issuance of the
Certificates, or the consummation by the Depositor of the other transactions
contemplated by this Agreement or the Mortgage Loan Purchase Agreement, except
such consents, approvals, authorizations, registrations or qualifications as (a)
may be required under State securities or blue sky laws, (b) have been
previously obtained or (c) the failure of which to obtain would not have a
material adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement or the Mortgage Loan
Purchase Agreement;
(ix) There are no actions, proceedings or investigations pending before or, to
the Depositor's knowledge, threatened by any court, administrative agency or
other tribunal to which the Depositor is a party or of which any of its
properties is the subject: (a) which if determined adversely to the Depositor
would have a material adverse effect on the business, results of operations or
financial condition of the Depositor; (b) asserting the invalidity of this
Agreement, the Mortgage Loan Purchase Agreement or the Certificates; (c) seeking
to prevent the issuance of the Certificates or the consummation by the Depositor
of any of the transactions contemplated by this Agreement or the Mortgage Loan
Purchase Agreement, as the case may be; or (d) which might materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement or the Mortgage Loan Purchase
Agreement; and
(x) The Depositor has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary action on the part of the
Depositor the execution, delivery and performance of this Agreement and this
Agreement, assuming the due authorization, execution and delivery thereof by the
parties thereto other than the Depositor, constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, except to the extent that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
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Section 2.06 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the
delivery to it or a Custodian of the Mortgage Files, subject to the provisions
of Sections 2.01 and 2.02, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
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
written order of the Depositor, the Certificates in authorized denominations.
The interests evidenced by the Certificates constitute the entire beneficial
ownership interest in the Trust Fund.
Section 2.07 Reserved.
Section 2.08 Conveyance of REMIC Regular Interests and Acceptance of REMIC 1 by
the Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Depositor in and to
the REMIC 1 Regular Interests for the benefit of the holders of the Certificates
(other than the Class C Certificates, the Class P Certificates, the Class R-CX
Certificates and the Class R-PX Certificates), REMIC CX, as holder of the Class
C Interest, and REMIC PX, as holder of the Class P Interest. The Trustee
acknowledges receipt of the REMIC 1 Regular Interests (which are uncertificated)
and declares that it holds and will hold the same in trust for the exclusive use
and benefit of the holders of the Certificates (other than the Class C
Certificates, the Class P Certificates, the Class R-CX Certificates and the
Class R-PX Certificates), and REMIC CX, as holder of the Class C Interest, and
REMIC PX, as holder of the Class P Interest. The interests evidenced by the
Class R-2 Interest, the Regular Certificates (other than the Class C
Certificates and the Class P Certificates), and the REMIC 2 Regular Interests,
constitute the entire beneficial ownership interest in REMIC 2.
(b) In exchange for the REMIC 1 Regular Interests and, concurrently with the
assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates (other than the Class C Certificates and the Class P Certificates)
in authorized denominations evidencing (together with the Class R-2 Interest and
the REMIC 2 Regular Interests) 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 Class C Interest for the benefit of the holders of the Class C Certificates
and the Class R-CX Certificates. 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-CX Certificates. The interests evidenced by the Class C Certificates and
the Class R-CX Certificates constitute the entire beneficial ownership interest
in REMIC CX.
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(d) In exchange for the Class C Interest and, concurrently with the assignment
to the Trustee thereof, pursuant to the written request of the Depositor
executed by an officer of the Depositor, the Trustee has executed, authenticated
and delivered to or upon the order of the Depositor, the Class C Certificates in
authorized denominations evidencing (together with the Class R-CX Interest) the
entire beneficial ownership interest in REMIC CX.
(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 for the benefit of the holders of the Class P Certificates
and the Class R-PX 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-PX Certificates. The interests evidenced by the Class P Certificates and
the Class R-PX Certificates constitute the entire beneficial ownership interest
in REMIC PX.
(f) In exchange for the Class P Interest and, concurrently with the assignment
to the Trustee thereof, pursuant to the written request of the Depositor
executed by an officer of the Depositor, the Trustee has executed, authenticated
and delivered to or upon the order of the Depositor, the Class P Certificates in
authorized denominations evidencing (together with the Class R-PX Interest) the
entire beneficial ownership interest in REMIC PX.
(g) Concurrently with (i) the assignment and delivery to the Trustee of REMIC 1
(including the Residual Interest therein represented by the Class R-1 Interest)
and the acceptance by the Trustee thereof, pursuant to Section 2.01, Section
2.02 and Section 2.08(a), and (ii) the assignment and delivery to the Trustee of
REMIC 2 (including the Residual Interest therein represented by the Class R-2
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.08(c)
and Section 2.08(e), the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed, authenticated
and delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations evidencing the Class R-1 Interest and the Class R-2
Interest, the Class R-CX Certificates evidencing the Class R-CX Interest and the
Class R-PX Certificates evidencing the Class R-PX Interest.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Master Servicer.
The Master Servicer shall service and administer the Mortgage Loans on behalf of
the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of mortgage lenders and loan servicers administering similar mortgage loans in
the local areas where the related Mortgaged Property is located but without
regard to:
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(i) any relationship that the Master Servicer, any Sub-Servicer or any Affiliate
of the Master Servicer or any Sub-Servicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the Master Servicer or
any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or Servicing Advances;
or
(iv) the Master Servicer's or any Sub-Servicer's right to receive compensation
for its services hereunder or with respect to any particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration in accordance with
policies and procedures generally accepted in the mortgage banking industry.
Without limiting the generality of the foregoing, the Master Servicer in its own
name or in the name of a Sub-Servicer is hereby authorized and empowered by the
Trustee when the Master Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver,
on behalf of the Certificateholders and the Trustee, and upon notice to the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee and Certificateholders. The Master Servicer
shall service and administer the Mortgage Loans in accordance with applicable
state and federal law and shall provide to the Mortgagors any reports required
to be provided to them thereby. The Master Servicer shall also comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any standard hazard insurance policy. Subject to Section 3.17, the
Trustee, shall execute, at the written direction of the Master Servicer, and
furnish to the Master Servicer and any Sub-Servicer such documents as are
necessary or appropriate to enable the Master Servicer or any Sub-Servicer to
carry out their servicing and administrative duties hereunder, and the Trustee
hereby grants to the Master Servicer and each Sub-Servicer a power of attorney
to carry out such duties including a power of attorney to take title to
Mortgaged Properties after foreclosure on behalf of the Trustee and the
Certificateholders. The Trustee, at the direction of the Master Servicer, shall
execute a separate power of attorney in favor of (and furnish such power of
attorney to) the Master Servicer and/or each Sub-Servicer for the purposes
described herein to the extent necessary or desirable to enable the Master
Servicer to perform its duties hereunder. The Trustee shall not be liable for
the actions of the Master Servicer or any Sub-Servicers under such powers of
attorney.
Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
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Advances reimbursable in the first instance from collections on the related
Mortgage Loans from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the Master Servicer
may not make any future advances with respect to a Mortgage Loan (except as
provided in Section 4.04) and the Master Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default
with respect to the Mortgage Loan or such default is, in the judgment of the
Master Servicer, reasonably foreseeable) or (ii) permit any modification, waiver
or amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
(B) cause any Trust REMIC to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or contributions after the
startup day under the REMIC Provisions.
The Master Servicer may delegate its responsibilities under this Agreement;
provided, however, that no such delegation shall release the Master Servicer
from the responsibilities or liabilities arising under this Agreement.
With respect to each Mortgage Loan, the Master Servicer will furnish, or cause
to be furnished, information regarding the borrower credit file related to such
Mortgage Loan to credit reporting agencies in compliance with the provisions of
the Fair Credit Reporting Act and the applicable implementing regulations.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements provided (i)
that such agreements would not result in a withdrawal or a downgrading by any
Rating Agency of the ratings on any Class of Certificates, any of the Other NIM
Notes or any of the Insured NIM Notes (without giving effect to any insurance
policy issued by the NIMS Insurer), as evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor and the NIMS Insurer and (ii)
that, except in the case of any Sub-Servicing Agreements the Master Servicer may
enter into with Washington Mutual, Inc. or any Affiliate thereof, the NIMS
Insurer shall have consented to such Sub-Servicing Agreements (which consent
shall not be unreasonably withheld) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans. That certain Subservicing Agreement by and
between the Master Servicer and Washington Mutual Bank, FA dated April 9, 2001
is hereby acknowledged as being permitted under this Agreement and meeting the
requirements applicable to Sub-Servicing Agreements set forth in this Agreement.
The Trustee is hereby authorized to acknowledge, at the request of the Master
Servicer, any Sub-Servicing Agreement that meets the requirements applicable to
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Sub-Servicing Agreements set forth in this Agreement and that is otherwise
permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the state or
states in which the related Mortgaged Properties it is to service are situated,
if and to the extent required by applicable law to enable the Sub-Servicer to
perform its obligations hereunder and under the Sub-Servicing Agreement, (ii) an
institution approved as a mortgage loan originator by the Federal Housing
Administration or an institution the deposit accounts in which are insured by
the FDIC and (iii) a Xxxxxx Xxx approved mortgage servicer. Each Sub-Servicing
Agreement must impose on the Sub-Servicer requirements conforming to the
provisions set forth in Section 3.08. The Master Servicer will examine each
Sub-Servicing Agreement and will be familiar with the terms thereof. The terms
of any Sub-Servicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Master Servicer and the Sub-Servicers may
enter into and make amendments to the Sub-Servicing Agreements or enter into
different forms of Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of this Agreement, and that no such amendment or different form shall
be made or entered into which could be reasonably expected to be materially
adverse to the interests of the Certificateholders, without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Sub-Servicing Accounts, or
credits and charges to the Sub-Servicing Accounts or the timing and amount of
remittances by the Sub-Servicers to the Master Servicer, are conclusively deemed
to be inconsistent with this Agreement and therefore prohibited. The Master
Servicer shall deliver to the NIMS Insurer and the Trustee copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer (except
as otherwise provided in the last sentence of this paragraph), for the benefit
of the Trustee and the Certificateholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement and, subject to the last
sentence of this paragraph, of the Seller under the Mortgage Loan Purchase
Agreement including, without limitation, any obligation to make advances in
respect of delinquent payments as required by a Sub-Servicing Agreement, or to
purchase or otherwise remedy as contemplated herein a Mortgage Loan on account
of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement, to
the extent, if any, that such recovery exceeds all amounts due in respect of the
related Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed.
Enforcement of the Mortgage Loan Purchase Agreement against the Seller shall be
effected by the Master Servicer to the extent it is not the Seller, and
otherwise by the Trustee, in accordance with the foregoing provisions of this
paragraph.
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Section 3.03 Successor Sub-Servicers.
The Master Servicer, with the written consent of the NIMS Insurer, shall be
entitled to terminate any Sub-Servicing Agreement and the rights and obligations
of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with
the terms and conditions of such Sub-Servicing Agreement. In the event of
termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer
either shall service directly the related Mortgage Loans or shall enter into a
Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under
Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such agreement may
be immediately terminated by the Trustee without fee, in accordance with the
terms of this Agreement, and the Trustee shall so terminate such Sub-Servicing
Agreement at the direction of the NIMS Insurer in the event that the Master
Servicer (or the Trustee, if then acting as Master Servicer) shall, for any
reason, no longer be the Master Servicer (including termination due to a Master
Servicer Event of Default).
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer and
a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification and no such indemnification shall be an expense of the Trust.
Section 3.05 No Contractual Relationship Between Sub-Servicers and the NIMS
Insurer, the 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 Master Servicer
alone, and the Trustee, the NIMS Insurer and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
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Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees and such fees shall
not be an expense of the Trust.
Section 3.06 Assumption or Termination of Sub-Servicing Agreements by Trustee.
In the event the Master Servicer shall for any reason no longer be the master
servicer (including by reason of the occurrence of a Master Servicer Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer under each Sub-Servicing Agreement that
the Master Servicer may have entered into, unless the Trustee elects to
terminate any Sub-Servicing Agreement in accordance with its terms as provided
in Section 3.03. Upon such assumption, the Trustee, its designee or the
successor servicer for the Trustee appointed pursuant to Section 7.02 shall be
deemed, subject to Section 3.03, to have assumed all of the Master Servicer's
interest therein and to have replaced the Master Servicer as a party to each
Sub-Servicing Agreement to the same extent as if each Sub-Servicing Agreement
had been assigned to the assuming party, except that (i) the Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) none of the Trustee, its designee or any successor Master Servicer
shall be deemed to have assumed any liability or obligation of the Master
Servicer that arose before it ceased to be the Master Servicer.
The Master Servicer at its own expense and without reimbursement shall, upon
request of the 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.
Section 3.07 Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing, the
Master Servicer may in its discretion (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to this clause (ii) shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the Master Servicer shall make timely advances on
such Mortgage Loan during such extension pursuant to Section 4.04 and in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.04(d)
pursuant to which the Master Servicer shall not be required to make any such
advances that are Nonrecoverable Advances. Notwithstanding the foregoing, in the
event that any Mortgage Loan is in default or, in the judgment of the Master
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Servicer, such default is reasonably foreseeable, the Master Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify
or vary any term of such Mortgage Loan (including modifications that would
change the Mortgage Rate, forgive the payment of principal or interest or extend
the final maturity date of such Mortgage Loan, accept payment from the related
Mortgagor of an amount less than the Stated Principal Balance in final
satisfaction of such Mortgage Loan (such payment, a "Short Pay-off") or consent
to the postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor; provided, that in the judgment of the Master
Servicer, any such modification, waiver or amendment could reasonably be
expected to result in collections and other recoveries in respect of such
Mortgage Loans in excess of Net Liquidation Proceeds that would be recovered
upon the foreclosure of, or other realization upon, such Mortgage Loan and
provided further, that the NIMS Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Closing Date Mortgage Loans as of the Cut-off Date.
Section 3.08 Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a
Sub-Servicing Agreement, the Sub-Servicer shall be required to establish and
maintain one or more accounts (collectively, the "Sub-Servicing Account"). The
Sub-Servicing Account shall be an Eligible Account and shall be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for registered
Holders of Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2. The Sub-Servicer shall be required to deposit in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Sub-Servicer's receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the deposit of such funds into the clearing account. The
Sub-Servicer shall thereafter be required to deposit such proceeds in the
Collection Account or remit such proceeds to the Master Servicer for deposit in
the Collection Account not later than two Business Days after the deposit of
such amounts in the Sub-Servicing Account. For purposes of this Agreement, the
Master Servicer shall be deemed to have received payments on the Mortgage Loans
when the Sub-Servicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.
The Master Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Servicing Accounts"). Servicing Accounts
shall be Eligible Accounts. The Master Servicer shall deposit in the clearing
account (which account must be an Eligible Account) in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, all collections
from the Mortgagors (or related advances from Sub-Servicers) for the payment of
taxes, assessments, hazard insurance premiums and comparable items for the
account of the Mortgagors ("Escrow Payments") collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the deposit of
such funds in the clearing account, for the purpose of effecting the payment of
any such items as required under the terms of this Agreement. Withdrawals of
amounts from a Servicing Account may be made only to (i) effect payment of
taxes, assessments, hazard insurance premiums, and comparable items; (ii)
reimburse the Master Servicer (or a Sub-Servicer to the extent provided in the
related Sub-Servicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; (v) clear
and terminate the Servicing Account upon the termination of the Master
Servicer's obligations and responsibilities in respect of the Mortgage Loans
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under this Agreement in accordance with Article IX or (vi) recover amounts
deposited in error. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Master Servicer shall
determine whether any such payments are made by the Mortgagor in a manner and at
a time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Master Servicer assumes full responsibility for
the payment of all such bills within such time and shall effect payments of all
such bills irrespective of the Mortgagor's faithful performance in the payment
of same or the making of the Escrow Payments and shall make advances from its
own funds to effect such payments; provided, however, that such advances shall
constitute Servicing Advances.
Section 3.10 Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee and the Certificateholders. On behalf of the Trust Fund, the Master
Servicer shall deposit or cause to be deposited in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Master Servicer's receipt thereof, and shall thereafter deposit in the
Collection Account, in no event more than two Business Days after the deposit of
such funds into the clearing account, as and when received or as otherwise
required hereunder, the following payments and collections received or made by
it subsequent to the Cut-off Date (other than in respect of principal or
interest on the related Mortgage Loans due on or before the Cut-off Date or
payments (other than Principal Prepayments) received by it on or prior to the
Cut-off Date but allocable to a Due Period subsequent thereto):
(i) all payments on account of principal, including Principal Prepayments, on
the Mortgage Loans;
(ii) all payments on account of interest (net of the related Servicing Fee) on
each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other than proceeds
collected in respect of any particular REO Property and amounts paid by the
Master Servicer in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01) and all Gross Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12 in connection
with any losses realized on Permitted Investments with respect to funds held in
the Collection Account;
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(v) any amounts required to be deposited by the Master Servicer pursuant to the
second paragraph of Section 3.14(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in accordance
with Section 2.03, Section 3.16 or Section 9.01 and all Master Servicer
Prepayment Charge Payment Amounts required to be deposited in the Collection
Account pursuant to Section 2.03;
(vii) all Substitution Adjustments;
(viii) all Prepayment Charges collected by the Master Servicer; and
(ix) without duplication, all payments of claims received by the Master Servicer
under the PMI Policy.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Qualified Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection Accounts shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, NSF fees,
reconveyance fees, assumption fees and other similar fees and charges (other
than Prepayment Charges) need not be deposited by the Master Servicer in the
Collection Account and shall, upon collection, belong to the Master Servicer as
additional compensation for its servicing activities. In the event the Master
Servicer shall deposit in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and maintain one or
more accounts (such account or accounts, the "Distribution Account"), held in
trust for the benefit of the Trustee and the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Funds (calculated without regard to the references in the definition
thereof to amounts that may be withdrawn from the Distribution Account) for the
related Distribution Date then on deposit in the Collection Account, the amount
of all Prepayment Charges on the Prepayment Charge Schedule collected by the
Master Servicer in connection with any of the Mortgage Loans and any Master
Servicer Prepayment Charge Payment Amounts then on deposit in the Collection
Account and the amount of any funds reimbursable to an Advancing Person pursuant
to Section 3.27 and (ii) on each Business Day as of the commencement of which
the balance on deposit in the Collection Account exceeds $75,000 following any
withdrawals pursuant to the next succeeding sentence, the amount of such excess,
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but only if the Collection Account constitutes an Eligible Account solely
pursuant to clause (ii) of the definition of "Eligible Account." If the balance
on deposit in the Collection Account exceeds $75,000 as of the commencement of
business on any Business Day and the Collection Account constitutes an Eligible
Account solely pursuant to clause (ii) of the definition of "Eligible Account,"
the Master Servicer shall, on or before 3:00 p.m. New York time on such Business
Day, withdraw from the Collection Account any and all amounts payable or
reimbursable to the Depositor, the Master Servicer, the Trustee, the Seller or
any Sub-Servicer pursuant to Section 3.11 and shall pay such amounts to the
Persons entitled thereto. In order to comply with its duties under the U.S.
Patriot Act, the Trustee shall obtain and verify certain information and
documentation from the owners of the account that it establishes pursuant to
this Agreement, including, but not limited to, each account owner's name,
address, and other identifying information.
(c) Funds in the Collection Account and the Distribution Account may be invested
in Permitted Investments in accordance with the provisions set forth in Section
3.12. The Master Servicer shall give notice to the Trustee, the NIMS Insurer,
the Depositor and the Rating Agencies 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 Master Servicer, the NIMS Insurer, the Depositor and
the Rating Agencies of the location of the Distribution Account when established
and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered by the
Master Servicer to the 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 Master 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, and the
Trustee shall withdraw, such amount from the Distribution Account and remit to
the Master Servicer any such amount, any provision herein to the contrary
notwithstanding. In addition, the Master Servicer shall deliver to the Trustee
from time to time for deposit, and the Trustee shall so deposit, in the
Distribution Account:
(i) any Advances, as required pursuant to Section 4.04, unless delivered
directly to the Trustee by an Advancing Person;
(ii) any amounts required to be deposited pursuant to Section 3.23(d) or (f) in
connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in connection with a
purchase of Mortgage Loans and REO Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to Section 3.24 in connection
with any Prepayment Interest Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the federal bankruptcy court
having jurisdiction in such matters.
(e) Promptly upon receipt of any Stayed Funds, whether from the Master Servicer,
a trustee in bankruptcy, federal bankruptcy court or other source, the Trustee
shall deposit such funds in the Distribution Account, subject to withdrawal
thereof pursuant to Section 7.02(b) or as otherwise permitted hereunder.
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Section 3.11 Withdrawals from the Collection Account and Distribution Account.
(a) The Master Servicer shall, from time to time, make withdrawals from the
Collection Account, for any of the following purposes or as described in Section
4.04, without priority:
(i) to remit to the Trustee for deposit in the Distribution Account the amounts
required to be so remitted pursuant to Section 3.10(b) or permitted to be so
remitted pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer for Advances,
but only to the extent of amounts received which represent Late Collections (net
of the related Servicing Fees) of Monthly Payments on the related Mortgage Loans
in accordance with the provisions of Section 4.04;
(iii) subject to Section 3.16(d), to pay the Master Servicer or any Sub-Servicer
(a) any unpaid Servicing Fees or (b) any unreimbursed Servicing Advances with
respect to each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Insurance Proceeds, Gross Subsequent Recoveries or other
amounts as may be collected by the Master Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan;
(iv) to pay to the Master Servicer as servicing compensation (in addition to the
Servicing Fee) on the Master Servicer Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer or the Seller, as the case may be, with
respect to each Mortgage Loan that has previously been purchased or replaced
pursuant to Section 2.03 or Section 3.16(c) all amounts received thereon
subsequent to the date of purchase or substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance or Servicing Advance
previously made which the Master Servicer has determined to be a Nonrecoverable
Advance in accordance with the provisions of Section 4.04;
(vii) to reimburse the Master Servicer or the Depositor for expenses incurred by
or reimbursable to the Master Servicer or the Depositor, as the case may be,
pursuant to Section 6.03;
(viii) to reimburse the NIMS Insurer, the Master Servicer or the Trustee, as the
case may be, for enforcement expenses reasonably incurred in respect of the
breach or defect giving rise to the purchase obligation under Section 2.03 of
this Agreement that were included in the Purchase Price of the Mortgage Loan,
including any expenses arising out of the enforcement of the purchase
obligation; provided, however, that the reimbursement to the NIMS Insurer
pursuant to this clause shall be limited to an annual amount of $25,000;
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(ix) to pay, or to reimburse the Master Servicer for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to Section
3.16(b); and
(x) to clear and terminate the Collection Account pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting, on an
individual Mortgage Loan basis, for the purpose of justifying any withdrawal
from the Collection Account, to the extent held by or on behalf of it, pursuant
to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above. The Master Servicer
shall provide written notification to the Trustee and the NIMS Insurer, on or
prior to the next succeeding Master Servicer Remittance Date, upon making any
withdrawals from the Collection Account pursuant to subclause (vii) above.
(b) The Trustee shall, from time to time, make withdrawals from the Distribution
Account, for any of the following purposes, without priority:
(i) to make distributions to Certificateholders in accordance with Section 4.01;
(ii) to pay to itself amounts to which it is entitled pursuant to Section 8.05
or to pay any other Extraordinary Trust Fund Expenses;
(iii) to pay to itself any interest income earned on funds deposited in the
Distribution Account pursuant to Section 3.12(c);
(iv) to reimburse itself pursuant to Section 7.02 or pursuant to Section 7.01 to
the extent such amounts in Section 7.01 were not reimbursed by the Master
Servicer;
(v) to pay any amounts in respect of taxes pursuant to Section 10.01(g);
(vi) to remit to the Master Servicer any amount deposited in the Distribution
Account by the Master Servicer but not required to be deposited therein in
accordance with Section 3.10(d);
(vii) to pay to an Advancing Person reimbursements for Advances and/or Servicing
Advances pursuant to Section 3.27;
(viii) to clear and terminate the Distribution Account pursuant to Section 9.01;
(ix) to pay the PMI Insurer the PMI Insurer Fee based on information received
from the Master Servicer; and
(x) to pay itself the Trustee Fees.
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Section 3.12 Investment of Funds in the Collection Account and the Distribution
Account.
(a) The Master Servicer may direct any depository institution maintaining the
Collection Account and any REO Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, the Distribution Account is also an "Investment Account"), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Trustee is the obligor thereon and (ii) no later than
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Trustee is the obligor thereon. 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 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 actual notice 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 Master
Servicer shall be for the benefit of the Master Servicer and shall be subject to
its withdrawal in accordance with Section 3.11 or Section 3.23, as applicable.
The Master Servicer shall deposit in the Collection Account or any REO Account,
as applicable, from its own funds, the amount of any loss of principal incurred
in respect of any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.
(c) All income and gain realized from the investment of funds deposited in the
Distribution Account held by or on behalf of the Trustee shall be for the
benefit of the Trustee and shall be subject to its withdrawal at any time. The
Trustee shall deposit in the Distribution Account, from its own funds, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
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(d) Except as otherwise expressly provided in this Agreement, if any default
occurs in the making of a payment due under any Permitted Investment, or if a
default occurs in any other performance required under any Permitted Investment,
the Trustee may, and subject to Section 8.01 and Section 8.02(v), upon the
request of the Holders of Certificates representing more than 50% of the Voting
Rights allocated to any Class of Certificates shall, take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
Section 3.13 Reserved.
Section 3.14 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan fire
insurance with extended coverage on the related Mortgaged Property in an amount
which is at least equal to the least of (i) the then current principal balance
of such Mortgage Loan, (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Master Servicer
shall also cause to be maintained fire insurance with extended coverage on each
REO Property in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at the
time it became an REO Property, plus accrued interest at the Mortgage Rate and
related Servicing Advances. The Master Servicer will comply in the performance
of this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid principal balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).
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In the event that the Master Servicer shall obtain and maintain a blanket policy
with an insurer having a General Policy Rating of A:X or better in Best's Key
Rating Guide (or such other rating that is comparable to such rating) insuring
against hazard losses on all of the Mortgage Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in the first two sentences
of this Section 3.14, it being understood and agreed that such policy may
contain a deductible clause, in which case the Master Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged
Property or REO Property a policy complying with the first two sentences of this
Section 3.14, and there shall have been one or more losses which would have been
covered by such policy, deposit to the Collection Account from its own funds the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of
itself, the Trustee and Certificateholders, claims under any such blanket policy
in a timely fashion in accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of this Agreement a
policy or policies of insurance covering errors and omissions for failure in the
performance of the Master Servicer's obligations under this Agreement, which
policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Master Servicer or any of its Affiliates has obtained
a waiver of such Xxxxxx Mae or Xxxxxxx Mac requirements from either Xxxxxx Mae
or Xxxxxxx Mac. The Master 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 Master Servicer or any of its Affiliates has obtained a waiver of
such Xxxxxx Mae or Xxxxxxx Mac requirements from either Xxxxxx Mae or Xxxxxxx
Mac. The Master Servicer shall provide the Trustee and the NIMS Insurer (upon
such party's reasonable request) with copies of any such insurance policies and
fidelity bond. The Master Servicer shall be deemed to have complied with this
provision if an Affiliate of the Master Servicer has such errors and omissions
and fidelity bond coverage and, by the terms of such insurance policy or
fidelity bond, the coverage afforded thereunder extends to the Master Servicer.
Any such errors and omissions policy and fidelity bond shall by its terms not be
cancelable without thirty days' prior written notice to the Trustee. The Master
Servicer shall also cause each Sub-Servicer to maintain a comparable policy of
insurance covering errors and omissions and a fidelity bond meeting such
requirements.
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
The Master Servicer shall, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not be required to take such action if in its sole
business judgment the Master Servicer believes that the collections and other
recoveries in respect of such Mortgage Loans could reasonably be expected to be
maximized if the Mortgage Loan were not accelerated, and the Master Servicer
shall not exercise any such rights if prohibited by law from doing so. If the
Master Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
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proviso to the preceding sentence apply, the Master Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Master Servicer
may also enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable under the circumstances) it shall have received confirmation,
in writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Master Servicer in respect of any assumption,
modification or substitution of liability agreement will be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. The Master Servicer shall notify the Trustee and the NIMS Insurer that
any such substitution, modification or assumption agreement has been completed
by forwarding to the Trustee (with a copy to the NIMS Insurer) the executed
original of such substitution, modification or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Master Servicer may be restricted by law from preventing,
for any reason whatever. For purposes of this Section 3.15, the term
"assumption" is deemed to also include a sale of the Mortgaged Property subject
to the Mortgage that is not accompanied by an assumption or substitution of
liability agreement.
Section 3.16 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts consistent with the
servicing standard set forth in Section 3.01, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07. The Master Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that such
costs and expenses will constitute and be recoverable as Servicing Advances by
the Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
shall not be required to expend its own funds toward the restoration of such
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property unless it shall determine in its sole and absolute discretion that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or any other
provision of this Agreement, with respect to any Mortgage Loan as to which the
Master Servicer has received actual notice of, or has actual knowledge of, the
presence of any toxic or hazardous substance on the related Mortgaged Property,
the Master Servicer shall not, on behalf of the Trustee, either (i) obtain title
to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise
or (ii) otherwise acquire possession of, or take any other action with respect
to, such Mortgaged Property, if, as a result of any such action, the Trustee,
the Trust Fund or the Certificateholders would be considered to hold title to,
to be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by an
Independent Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable environmental laws
or, if not, that it would be in the best economic interest of the Trust Fund to
take such actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property relating to
the use, management or disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
Notwithstanding the foregoing, with respect to the Mortgage Loans, if such
environmental audit reveals, or if the Master Servicer has knowledge or notice,
that the Mortgaged Property securing the Mortgage Loan contains such wastes or
substances or is within one mile of the site of such wastes or substances, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the NIMS Insurer.
The cost of the environmental audit report contemplated by this Section 3.16
shall be advanced by the Master Servicer, subject to the Master Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.11(a)(ix), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans. It is understood
by the parties hereto that any such advance will constitute a Servicing Advance.
If the Master Servicer determines, as described above, that it is in the best
economic interest of the Trust Fund to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
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remediation of hazardous substances, hazardous materials, hazardous wastes or
petroleum-based materials affecting any such Mortgaged Property, then the Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund. The cost of any such compliance, containment, cleanup or
remediation shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans. It is
understood by the parties hereto that any such advance will constitute a
Servicing Advance.
(c) The Master Servicer may at its option purchase from REMIC 1 any Mortgage
Loan or related REO Property that is 90 days or more delinquent or that has been
otherwise in default for 90 days or more, which the Master Servicer determines
in good faith will otherwise become subject to foreclosure proceedings (evidence
of such determination to be delivered in writing to the Trustee prior to
purchase), at a price equal to the Purchase Price; provided, however, that the
Master Servicer shall purchase any such Mortgage Loans or related REO Properties
on the basis of delinquency or default, purchasing first the Mortgage Loans or
related REO Properties that became delinquent or otherwise in default on an
earlier date; and provided, further, that such option shall expire as of the
last day of the calendar quarter during which such Mortgage Loan or related REO
Property became 90 days delinquent or otherwise in default for 90 days or more.
In the event the Master Servicer does not exercise its option to purchase from
REMIC 1 any such Mortgage Loan or related REO Property prior to the expiration
of such option, the NIMS Insurer shall be entitled to purchase such Mortgage
Loan or related REO Property at any time thereafter. The Purchase Price for any
Mortgage Loan or related REO Property purchased hereunder shall be deposited in
the Collection Account, and the Trustee, upon receipt of written certification
from the Master Servicer of such deposit, shall release or cause to be released
to the Master Servicer or the NIMS Insurer, as applicable, the related Mortgage
File and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Master Servicer or the NIMS
Insurer, as applicable, shall furnish and as shall be necessary to vest in the
Master Servicer or the NIMS Insurer, as applicable, title to any Mortgage Loan
or related REO Property released pursuant hereto.
(d) Proceeds received (other than any Prepayment Charges received) in connection
with any Final Recovery Determination, as well as any recovery resulting from a
partial collection of Insurance Proceeds, Liquidation Proceeds or Gross
Subsequent Recoveries, in respect of any Mortgage Loan, will be applied in the
following order of priority: first, to reimburse the Master Servicer or any
Sub-Servicer for any related unreimbursed Servicing Advances and Advances,
pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid
interest on the Mortgage Loan, to the date of the Final Recovery Determination,
or to the Due Date prior to the Distribution Date on which such amounts are to
be distributed if not in connection with a Final Recovery Determination; and
third, as a recovery of principal of the Mortgage Loan. If the amount of the
recovery so allocated to interest is less than the full amount of accrued and
unpaid interest due on such Mortgage Loan, the amount of such recovery will be
allocated by the Master Servicer as follows: first, to unpaid Servicing Fees;
and second, to the balance of the interest then due and owing. The portion of
the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Master Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).
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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 Master
Servicer of a notification that payment in full shall be escrowed in a manner
customary for such purposes, the Master Servicer will promptly notify the
Trustee and the applicable Custodian holding the related Mortgage File by a
certification in the form of Exhibit E-2 (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Representative and shall request delivery to it of the related
Mortgage File. Upon receipt of such certification and request, the Trustee or
such Custodian, as applicable, shall promptly release the related Mortgage File
to the Master Servicer. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Collection
Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or foreclosure of any
Mortgage Loan, including, for this purpose, collection under any insurance
policy relating to the Mortgage Loans, the Trustee or the applicable Custodian
shall, upon request of the Master Servicer and delivery to the Trustee or the
applicable Custodian of a Request for Release in the form of Exhibit E-l,
release the related Mortgage File to the Master Servicer, and the Trustee or the
applicable Custodian, on behalf of the Trustee, shall, at the direction of the
Master Servicer, execute such documents as shall be necessary to the prosecution
of any such proceedings and the Master Servicer shall retain such Mortgage File
in trust for the benefit of the Certificateholders. Such Request for Release
shall obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Trustee or the applicable Custodian when
the need therefor by the Master Servicer no longer exists, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or the Mortgage File or such
document has been delivered to an attorney, or to a public trustee or other
public official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee or the applicable Custodian a certificate of a Servicing Representative
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Representative stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or the applicable Custodian to the Master Servicer or its designee.
(c) At the direction of the Master Servicer and upon written certification of a
Servicing Representative, each of the Trustee or the applicable Custodian shall
execute and deliver to the Master Servicer any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
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equity, or shall execute and deliver to the Master Servicer a power of attorney
sufficient to authorize the Master Servicer or the Sub-Servicer to execute such
documents on its behalf, provided that each of the Trustee or the applicable
Custodian shall be obligated to execute the documents identified above if
necessary to enable the Master Servicer or the Sub-Servicer to perform their
respective duties hereunder or under the Sub-Servicing Agreement. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee or the applicable Custodian and a statement as to the
reason such documents or pleadings are required.
Section 3.18 Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Servicing Fee with respect to each Mortgage
Loan payable solely from payments of interest in respect of such Mortgage Loan,
subject to Section 3.24. In addition, the Master Servicer shall be entitled to
recover unpaid Servicing Fees out of Late Collections, Insurance Proceeds,
Liquidation Proceeds or Gross Subsequent Recoveries to the extent permitted by
Section 3.11(a)(iii) and out of amounts derived from the operation and sale of
an REO Property to the extent permitted by Section 3.23. The right to receive
the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement; provided, however, that the Master
Servicer may pay from the Servicing Fee any amounts due to a Sub-Servicer
pursuant to a Sub-Servicing Agreement entered into under Section 3.02.
Additional servicing compensation in the form of assumption or modification
fees, late payment charges, NSF fees, reconveyance fees and other similar fees
and charges (other than Prepayment Charges) shall be retained by the Master
Servicer (subject to Section 3.24) only to the extent such fees or charges are
received by the Master Servicer. The Master Servicer shall also be entitled
pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account, and
pursuant to Section 3.23(b) to withdraw from any REO Account, as additional
servicing compensation, interest or other income earned on deposits therein,
subject to Section 3.12. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including premiums for the insurance required by Section 3.14, to the extent
such premiums are not paid by the related Mortgagors or by a Sub-Servicer, it
being understood however, that payment of such premiums by the Master Servicer
shall constitute Servicing Advances and servicing compensation of each
Sub-Servicer, and to the extent provided herein and in Section 8.05, the fees
and expenses of the Trustee) and shall not be entitled to reimbursement therefor
except as specifically provided herein.
Section 3.19 Reports to the Trustee; Collection Account Statements.
Not later than fifteen days after each Distribution Date, the Master Servicer
shall forward to the Trustee, the NIMS Insurer and the Depositor a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on such Distribution Date and showing, for
the period covered by such statement, the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified in
Section 3.10(a) and each category of withdrawal specified in Section 3.11. Such
statement may be in the form of the then current Xxxxxx Xxx Monthly Accounting
Report for its Guaranteed Mortgage Pass-Through Program with appropriate
additions and changes, and shall also include information as to the aggregate of
the outstanding principal balances of all of the Mortgage Loans as of the last
day of the calendar month immediately preceding such Distribution Date. Copies
of such statement shall be provided by the Trustee to any Certificateholder and
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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 Master Servicer to the Trustee.
Section 3.20 Statement as to Compliance.
The Master Servicer shall deliver to the Trustee, the Depositor, the NIMS
Insurer and each Rating Agency on or before March 10 of each calendar year prior
to and including the calendar year in which a Form 15 is filed with respect to
the Trust Fund and April 30 of each calendar year thereafter, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Master Servicer during the preceding year and of performance
under this Agreement has been made under such officers' supervision and (ii) to
the best of such officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. Copies of any such statement shall be provided by the Trustee to any
Certificateholder and to any Person identified to the Trustee as a prospective
transferee of a Certificate, upon the request and at the expense of the
requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21 Independent Public Accountants' Servicing Report.
Not later than March 10 of each calendar year prior to and including the
calendar year in which a Form 15 is filed with respect to the Trust Fund and
April 30 of each calendar year thereafter, the Master Servicer, at its expense,
shall cause a nationally recognized firm of independent certified public
accountants to furnish to the Master Servicer a report stating that (i) it has
obtained a letter of representation regarding certain matters from the
management of the Master Servicer which includes an assertion that the Master
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed fiscal year and (ii) on the basis of an examination conducted by such
firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Sub-Servicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Sub-Servicers. Immediately upon receipt of such report, the Master Servicer
shall furnish a copy of such report to the Trustee, the NIMS Insurer and each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided that
such statement is delivered by the Master Servicer to the Trustee. In the event
such firm of independent certified public accountants requires the Trustee to
agree to the procedures performed by such firm, the Master Servicer shall direct
the Trustee in writing to so agree; it being understood and agreed that the
Trustee will deliver such letter of agreement in conclusive reliance upon the
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direction of the Master Servicer, and the Trustee has not made any independent
inquiry or investigation as to, and shall have no obligation or liability in
respect of, the sufficiency, validity or correctness of such procedures.
Section 3.22 Access to Certain Documentation.
The Master Servicer shall provide to the Office of Thrift Supervision, the FDIC
and any other federal or state banking or insurance regulatory authority that
may exercise authority over any Certificateholder access to the documentation
regarding the Mortgage Loans serviced by the Master Servicer under this
Agreement, as may be required by applicable laws and regulations. Such access
shall be afforded without charge, but only upon reasonable request and during
normal business hours at the offices of the Master Servicer designated by it. In
addition, access to the documentation regarding the Mortgage Loans serviced by
the Master Servicer under this Agreement will be provided to any
Certificateholder, the NIMS Insurer, the Trustee and to any Person identified to
the Master Servicer as a prospective transferee of a Certificate, upon
reasonable request during normal business hours at the offices of the Master
Servicer designated by it at the expense of the Person requesting such access.
Section 3.23 Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be taken in the
name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. The Master Servicer, on behalf of REMIC 1 (and on behalf of
the Trustee for the benefit of the Certificateholders), shall sell any REO
Property as soon as practicable and, in any event, shall either sell any REO
Property before the close of the third taxable year after the year REMIC 1
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or request from the Internal Revenue Service, no later than 60 days
before the day on which the three-year grace period would otherwise expire, an
extension of the three-year grace period, unless the Master Servicer shall have
delivered to Trustee, the NIMS Insurer and the Depositor an Opinion of Counsel,
addressed to the Trustee, the NIMS Insurer and the Depositor, to the effect that
the holding by REMIC 1 of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. If an extension of the three-year
period is granted, the Master Servicer shall sell the related REO Property no
later than 60 days prior to the expiration of such extension period. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain, or cause
to be established and maintained, with respect to REO Properties an account held
in trust for the Trustee for the benefit of the Certificateholders (the "REO
Account"), which shall be an Eligible Account. The Master Servicer may allow the
Collection Account to serve as the REO Account, subject to separate ledgers for
each REO Property. The Master Servicer may retain or withdraw any interest
income paid on funds deposited in the REO Account.
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(c) The Master Servicer shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with the manner in
which the Master Servicer manages and operates similar property owned by the
Master Servicer or any of its Affiliates, all on such terms and for such period
as the Master Servicer deems to be in the best interests of Certificateholders.
In connection therewith, the Master Servicer shall deposit, or cause to be
deposited in the clearing account (which account must be an Eligible Account) in
which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, all
revenues received by it with respect to an REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO Property that
may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds as Servicing Advances such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if such Servicing Advance would not
constitute a Nonrecoverable Advance.
Notwithstanding the foregoing, neither the Master Servicer nor the Trustee
shall:
(i) authorize the Trust Fund to enter into, renew or extend any New Lease with
respect to any REO Property, if the New Lease by its terms will give rise to any
income that does not constitute Rents from Real Property;
(ii) authorize any amount to be received or accrued under any New Lease other
than amounts that will constitute Rents from Real Property;
(iii) authorize any construction on any REO Property, other than construction
permitted under Section 856(e)(4)(B) of the Code; or
(iv) authorize any Person to Directly Operate any REO Property on any date more
than 90 days after its date of acquisition by the Trust Fund;
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unless, in any such case, the Master Servicer has obtained an Opinion of Counsel
(the cost of which shall constitute a Servicing Advance), a copy of which shall
be provided to the NIMS Insurer and the Trustee, to the effect that such action
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code at any time that it is held
by REMIC 1, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be inconsistent
herewith;
(ii) any such contract shall require, or shall be administered to require, that
the Independent Contractor pay all costs and expenses incurred in connection
with the operation and management of such REO Property, including those listed
above, and remit all related revenues (net of such costs and expenses) to the
Master Servicer as soon as practicable, but in no event later than thirty days
following the receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating to any such
contract or to actions taken through any such Independent Contractor shall be
deemed to relieve the Master Servicer of any of its duties and obligations to
the Trustee on behalf of the Certificateholders with respect to the operation
and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in connection
with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees; provided, however, that to the extent that any payments made by such
Independent Contractor would constitute Servicing Advances if made by the Master
Servicer, such amounts shall be reimbursable as Servicing Advances made by the
Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c), the Master
Servicer may from time to time make withdrawals from the REO Account for any REO
Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect
of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer
for unreimbursed Servicing Advances and Advances made in respect of such REO
Property or the related Mortgage Loan. On the Master Servicer Remittance Date,
the Master Servicer shall withdraw from each REO Account maintained by it and
deposit into the Distribution Account in accordance with Section 3.10(d)(ii),
for distribution on the related Distribution Date in accordance with Section
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4.01, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.23(c) or this
Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its general servicing activities for
similar properties.
(f) The proceeds from the REO Disposition, net of any amount required by law to
be remitted to the Mortgagor under the related Mortgage Loan and net of any
payment or reimbursement to the Master Servicer or any Sub-Servicer as provided
above, shall be deposited in the Distribution Account in accordance with Section
3.10(d)(ii) on the Master Servicer Remittance Date in the month following the
receipt thereof for distribution on the related Distribution Date in accordance
with Section 4.01. Any REO Disposition shall be for cash only (unless changes in
the REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Master Servicer shall file information returns with respect to the
receipt of mortgage interest received in a trade or business, reports of
foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24 Obligations of the Master Servicer in Respect of Prepayment
Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit into the
Distribution Account on or before 3:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount ("Compensating Interest") equal to
the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for the
related Distribution Date resulting solely from Principal Prepayments during the
related Prepayment Period and (ii) the amount of its aggregate Servicing Fee for
the most recently ended calendar month.
Section 3.25 Obligations of the Master Servicer in Respect of Mortgage Rates and
Monthly Payments.
In the event that a shortfall in any collection on or liability with respect to
any Mortgage Loan results from or is attributable to adjustments to Mortgage
Rates, Monthly Payments or Stated Principal Balances that were made by the
Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.25 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note, as permitted by law and shall not be an
expense of the Trust.
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Section 3.26 Reserve Fund.
No later than the Closing Date, the Trustee, on behalf of the
Certificateholders, shall establish and maintain with itself a separate,
segregated trust account titled, "Reserve Fund, Deutsche Bank National Trust
Company, as Trustee, in trust for registered Holders of Long Beach Mortgage Loan
Trust 2004-2, Asset-Backed Certificates, Series 2004-2." The Trustee shall
account for the right to receive payments from the Reserve Fund as property that
the Trustee holds separate and apart from the REMIC Regular Interests.
(a) The following amounts shall be deposited into the Reserve Fund:
(i) On each Distribution Date, the Trustee shall deposit all amounts received
with respect to the Cap Agreements;
(ii) On the Closing Date, the Depositor shall deposit, or cause to be deposited,
into the Reserve Fund $1,000;
(iii) On each Distribution Date as to which there is a Net WAC Rate Carryover
Amount payable to any of the Class A Certificates, the Mezzanine Certificates or
the Class B Certificates, the Trustee has been directed by the Holders of the
Class C Certificates to, and therefore shall, deposit into the Reserve Fund the
amounts described in Section 4.01(d)(i)(s); and
(iv) On each Distribution Date as to which there are no Net WAC Rate Carryover
Amounts, the Trustee shall deposit into the Reserve Fund on behalf of the
Holders of the Class C Certificates, from amounts otherwise distributable to
such Class C Certificates, an amount such that when added to other amounts
already on deposit in the Reserve Fund, the aggregate amount on deposit therein
is equal to $1,000.
(b) The Reserve Fund shall be segregated into two separate portions, for which
the Trustee shall keep separate accounts. "Portion 1" of the Reserve Fund shall
consist of amounts deposited pursuant to Section 3.26(a)(i), above, plus any
amounts earned on any such funds while on deposit in the Reserve Fund. "Portion
2" of the Reserve Fund shall consist of amounts deposited pursuant to Sections
3.26(a)(ii), (a)(iii), and (a)(iv), above, plus any amounts earned on any such
funds while on deposit in the Reserve Fund. Amounts distributed from the Reserve
Fund under Sections 4.01(d)(ii) and 3.26(c) shall be deemed to be distributed
first from Portion 1 of the Reserve Fund to the extent thereof and then from
Portion 2.
(c) Each Portion of the Reserve Fund shall be treated as an "outside reserve
fund" under applicable Treasury regulations and shall not be part of any REMIC
created hereunder. For federal and state income tax purposes, the Trustee shall
be deemed to be the owner of Portion 1 of the Reserve Fund and no amount shall
be transferred by any REMIC to Portion 1 of the Reserve Fund. For federal and
state income tax purposes, the Holders of the Class C Certificates shall be
deemed to be the owners of Portion 2 of the Reserve Fund and all amounts
deposited into such Portion 2 of the Reserve Fund (other than the initial
deposit therein of $1,000) shall be treated as amounts distributed by REMIC 2 to
REMIC CX in respect of the Class C Interest, and then distributed by REMIC CX to
the Holders of the Class C Certificates. For federal and state income tax
purposes, payments in respect of the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates of Net WAC Rate Carryover Amounts will
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not be payments with respect to a "regular interest" in a REMIC within the
meaning of Code Section 860G(a)(1).
(d) By accepting a Class C Certificate, each Holder of a Class C Certificate
shall be deemed to have directed the Trustee to, and the Trustee shall pursuant
to such direction, deposit into the Reserve Fund the amounts described in
Section 3.26(a)(iii) and (a)(iv) above on each Distribution Date. By accepting a
Class C Certificate, each Holder of a Class C Certificate further agrees that
such direction is given for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by such acceptance.
(e) 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 Portion 2 of the Reserve Fund 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 Portion 2 of the
Reserve Fund is received by the Trustee, the Trustee shall invest the funds in
such Portion in Permitted Investments managed by the Trustee or an Affiliate of
the kind described in clause (vi) of the definition of Permitted Investments.
Notwithstanding the foregoing, any funds in Portion 2 of the Reserve Fund shall
be invested in Deutsche Bank Cash Management Fund 541 for so long as such
investment complies with clause (vi) of the definition of Permitted Investments.
All income and gain earned upon such investment shall be deposited into Portion
2 of the Reserve Fund.
The Trustee shall hold the funds in Portion 1 of the Reserve Fund uninvested in
an Eligible Account.
(f) For federal tax return and information reporting, the right of the
Certificateholders to receive payment on account of the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates from the Reserve Fund in
respect of any Net WAC Rate Carryover Amount shall be assigned a value of zero.
Section 3.27 Advance Facility.
(a) The Trustee, on behalf of the Trust Fund, at the direction of the Master
Servicer and with the consent of the NIMS Insurer, is hereby authorized to enter
into a facility with any Person which provides that such Person (an "Advancing
Person") may make all or a portion of the Advances and/or Servicing Advances to
the Trust Fund under this Agreement, although no such facility shall reduce or
otherwise affect the Master Servicer's obligation to fund such Advances and/or
Servicing Advances. To the extent that an Advancing Person makes all or a
portion of any Advance or any Servicing Advance and provides the Trustee with
notice acknowledged by the Master Servicer that such Advancing Person is
entitled to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.27(b). Such notice from the Advancing Person shall specify the
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amount of the reimbursement and shall specify which Section of this Agreement
permits the applicable Advance or Servicing Advance to be reimbursed. The
Trustee shall be entitled to rely without independent investigation on the
Advancing Person's statement with respect to the amount of any reimbursement
pursuant to this Section 3.27 and with respect to the Advancing Person's
statement with respect to the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed. An Advancing Person
whose obligations are limited to the making of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Article VI hereof and will not be deemed to be a
Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Trust Fund would not materially and
adversely affect the interests of any Certificateholder, then the NIMS Insurer
shall not withhold its consent to the Trust Fund's entering into such facility.
(b) If an advancing facility is entered into, then the Master Servicer shall not
be permitted to reimburse itself under any Section specified or for any amount
specified by the Advancing Person in the notice described under Section 3.27(a)
above and acknowledged by the Master Servicer prior to the remittance to the
Trust Fund, but instead the Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.10(a). The
Trustee is hereby authorized to pay to the Advancing Person reimbursements for
Advances and Servicing Advances from the Distribution Account to the same extent
the Master Servicer would have been permitted to reimburse itself for such
Advances and/or Servicing Advances in accordance with the specified Sections had
the Master Servicer itself made such Advance or Servicing Advance. The Trustee
is hereby authorized to pay directly to the Advancing Person such portion of the
Servicing Fee as the parties to any advancing facility may agree.
(c) All Advances and Servicing Advances made pursuant to the terms of this
Agreement shall be deemed made and shall be reimbursed on a "first in-first out"
(FIFO) basis.
Section 3.28 Policy; Claims Under the PMI Policy
Notwithstanding anything to the contrary elsewhere in this Article III, the
Master Servicer shall not agree to any modification or assumption of a PMI
Mortgage Loan or take any other action with respect to a PMI Mortgage Loan that
could result in denial of coverage under the PMI Policy. The Master Servicer
shall notify the PMI Insurer that the Trustee, as trustee on behalf of the
Certificateholders, is the insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. The Master Servicer shall take all actions required under
the PMI Policy as a condition to the payment of any such claim. Any amount
received from the PMI Insurer with respect to any such PMI Mortgage Loan shall
be deposited by the Master Servicer, no later than two Business Days following
receipt thereof, into the Collection Account.
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Section 3.29 Reserved.
Section 3.30 Cap Agreements.
(a) The Depositor hereby directs the Trustee to execute and deliver on behalf of
the Trust the Cap Assignment and authorizes the Trustee to perform its
obligations thereunder and under each of the Cap Agreements on behalf of the
Trust in accordance with the terms of the Cap Assignment and each of the Cap
Agreements.
(b) If the rating of the Cap Provider's obligations is withdrawn or reduced (in
the manner set forth in Section 12 of each of the Cap Agreements) below one of
the Approved Rating Thresholds (as defined in Section 12 of each of the Cap
Agreements), the Trustee shall, promptly after a Responsible Officer of the
Trustee has received actual knowledge or written notice of the reduction or
withdrawal of the rating (it being understood that the Trustee has no duty to
monitor the ratings of the Cap Provider), request the Cap Provider to take
actions required to be taken by the Cap Provider by Section 12 of each of the
Cap Agreements.
(c) In the event that any of the Cap Agreements is canceled or otherwise
terminated for any reason (other than the exhaustion of the interest rate
protection provided thereby or replacement of such Cap Agreement by the Cap
Provider in accordance with Section 3.30(b)), the Depositor shall, to the extent
a replacement contract is available, direct the Trustee to obtain from a
counterparty designated by the Depositor a replacement contract comparable to
such Cap Agreement (which both such counterparty and such replacement contract
shall be acceptable to the Trustee and the Holders of the Certificates entitled
to at least 50% of the Voting Rights) providing interest rate protection which
is equal to the then-existing protection provided by such Cap Agreement,
provided, however, that if the cost of any such replacement contract providing
the same interest rate protection would be greater than the amount of any early
termination payment received by the Trustee under the related Cap Agreement, the
amount of interest rate protection provided by such replacement contract may be
reduced to a level such that the cost of such replacement contract shall not
exceed the amount of such early termination payment.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Distributions.
(a) On each Distribution Date, the Trustee shall withdraw from the Distribution
Account that portion of the Available Funds for such Distribution Date
consisting of the Group I Interest Remittance Amount and 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 I Interest Remittance Amount or the Group II
Interest Remittance Amount remaining for such Distribution Date:
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(i) the Group I Interest Remittance Amount shall be distributed as follows:
(A) first, to the Class A-1 Certificates, the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount for such Class; and
(B) second, concurrently, to the Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates, the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount for such Classes, in each case
to the extent not paid pursuant to Section 4.01(a)(ii)(A) below, allocated among
the Class A-2 Certificates, the Class A-3 Certificates and the Class A-4
Certificates, pro rata, based on their respective entitlements.
(ii) the Group II Interest Remittance Amount shall be distributed as follows:
(A) first, concurrently, to the Class A-2 Certificates, the Class A-3
Certificates and the Class A-4 Certificates, the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount for such Classes, in each case,
allocated among the Class A-2 Certificates, the Class A-3 Certificates and the
Class A-4 Certificates, pro rata, based on their respective entitlements; and
(B) second, to the Class A-1 Certificates, the Monthly Interest Distributable
Amount and any Unpaid Interest Shortfall Amount for such Class, to the extent
not paid pursuant to Section 4.01(a)(i)(A) above.
(iii) The sum of any Group I Interest Remittance Amount and Group II Interest
Remittance Amount remaining undistributed following the distributions pursuant
to clauses (i) and (ii) above shall be distributed as follows:
first, to the Class M-1 Certificates, the related Monthly Interest Distributable
Amount;
second, to the Class M-2 Certificates, the related Monthly Interest
Distributable Amount;
third, to the Class M-3 Certificates, the related Monthly Interest Distributable
Amount;
fourth, to the Class M-4 Certificates, the related Monthly Interest
Distributable Amount;
fifth, to the Class M-5 Certificates, the related Monthly Interest Distributable
Amount;
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sixth, to the Class M-6 Certificates, the related Monthly Interest Distributable
Amount;
seventh, to the Class M-7 Certificates, the related Monthly Interest
Distributable Amount; and
eighth, to the Class B Certificates, the related Monthly Interest Distributable
Amount.
(iv) Any Group I Interest Remittance Amount or any Group II Interest Remittance
Amount remaining undistributed following distributions pursuant to clause (iii)
above shall be used in determining the amount of Net Monthly Excess Cashflow, if
any, for such Distribution Date.
(b) On each Distribution Date (a) prior to the Stepdown Date or (b) on which a
Trigger Event is in effect, the Class A Certificates, the Mezzanine Certificates
and the Class B Certificates shall be entitled to receive distributions in
respect of principal to the extent of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount in the following amounts and
order of priority:
(i) first,
(A) (x) an amount equal to the Group I Principal Distribution Amount shall be
distributed to the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and then
(y) any portion of the Group II Principal Distribution Amount distributable
pursuant to Section 4.01(b)(i)(B)(x), below, that remains following distribution
to the Group II Senior Certificates shall be distributed as set forth in Section
4.01(b)(i)(A)(x), above;
(B) (x) an amount equal to the Group II Principal Distribution Amount shall be
distributed as follows:
(I) to the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(II) to the Class A-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
(III) to the Class A-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and then
(y) any portion of the Group I Principal Distribution Amount distributable
pursuant to Section 4.01(b)(i)(A)(x), above, that remains following distribution
to the Class A-1 Certificates, shall be distributed as set forth in Section
4.01(b)(i)(B)(x) above.
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(ii) second, the sum of any Group I Principal Distribution Amount and Group II
Principal Distribution Amount remaining undistributed following the
distributions pursuant to Section 4.01(b)(i) shall be distributed in the
following order of priority:
first, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
second, to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
third, to the Class M-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
fourth, to the Class M-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
fifth, to the Class M-5 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
sixth, to the Class M-6 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
seventh, to the Class M-7 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
eighth, to the Class B Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(iii) Any principal remaining undistributed pursuant to Sections 4.01(b)(i) and
4.01(b)(ii) above shall be used in determining the amount of Net Monthly Excess
Cashflow, if any, for such Distribution Date.
(c) On each Distribution Date (a) on or after the Stepdown Date and (b) on which
a Trigger Event is not in effect, the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates shall be entitled to receive
distributions in respect of principal to the extent of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount in the
following amounts and order of priority:
(i) first,
(A) the Group I Principal Distribution Amount shall be distributed as follows:
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first, to the Class A-1 Certificates, the Group I Senior Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero; and
second, to the Group II Senior Certificates, the Group II Senior Principal
Distribution Amount, to the extent not paid pursuant to Section 4.01(c)(i)(B)
below to be distributed as follows:
(I) to the Class A-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(II) to the Class A-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(III) to the Class A-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(B) the Group II Principal Distribution Amount shall be distributed as follows:
first, to the Group II Senior Certificates, the Group II Senior Principal
Distribution Amount, to be distributed as follows:
(I) to the Class A-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(II) to the Class A-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(III) to the Class A-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
second, to the Class A-1 Certificates, the Group I Senior Principal Distribution
Amount, to the extent not paid pursuant to Section 4.01(c)(i)(A) above, until
the Certificate Principal Balance thereof has been reduced to zero.
(ii) second, the sum of any Group I Principal Distribution Amount and Group II
Principal Distribution Amount remaining undistributed following the distribution
pursuant to Section 4.01(c)(i) shall be distributed in the following order of
priority:
first, to the Class M-1 Certificates, the Class M-1 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
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second, to the Class M-2 Certificates, the Class M-2 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
third, to the Class M-3 Certificates, the Class M-3 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
fourth, to the Class M-4 Certificates, the Class M-4 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
fifth, to the Class M-5 Certificates, the Class M-5 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
sixth, to the Class M-6 Certificates, the Class M-6 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero;
seventh, to the Class M-7 Certificates, the Class M-7 Principal Distribution
Amount, until the Certificate Principal Balance thereof has been reduced to
zero; and
eighth, to the Class B Certificates, the Class B Principal Distribution Amount,
until the Certificate Principal Balance thereof has been reduced to zero.
(iii) Any principal remaining undistributed following distributions pursuant to
Sections 4.01(c)(i) and 4.01(c)(ii) shall be used in determining the amount of
Net Monthly Excess Cashflow, if any, for such Distribution Date.
(d) (i) On each Distribution Date, any Net Monthly Excess Cashflow shall be paid
in the following order of priority, in each case to the extent of the Net
Monthly Excess Cashflow remaining undistributed:
(a) to 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 for such Distribution Date, payable to such Class or Classes
of Certificates as part of the Group I Principal Distribution Amount or the
Group II Principal Distribution Amount, as applicable, pursuant to Section
4.01(b) or Section 4.01(c) above, as applicable;
(b) concurrently, to the Class A Certificates, in an amount equal to the Unpaid
Interest Shortfall Amount, if any, for such Classes for such Distribution Date
to the extent remaining unpaid after distribution of the Group I Interest
Remittance Amount and the Group II Interest Remittance Amount on such
Distribution Date, allocated among such classes, pro rata, based on their
respective entitlements;
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(c) to the Class M-1 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(d) to the Class M-1 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(e) to the Class M-2 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(f) to the Class M-2 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(g) to the Class M-3 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(h) to the Class M-3 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(i) to the Class M-4 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(j) to the Class M-4 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(k) to the Class M-5 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(l) to the Class M-5 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(m) to the Class M-6 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
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(n) to the Class M-6 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(o) to the Class M-7 Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(p) to the Class M-7 Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(q) to the Class B Certificates, in an amount equal to the Unpaid Interest
Shortfall Amount, if any, for such Class for such Distribution Date;
(r) to the Class B Certificates, in an amount equal to the Allocated Realized
Loss Amount, if any, for such Class for such Distribution Date;
(s) to the Reserve Fund, the amount equal to the difference between (x) the sum
of (A) any excess of the Net WAC Rate Carryover Amount, if any, with respect to
the Class A-1 Certificates for such Distribution Date over any amounts on
deposit in the Reserve Fund on such Distribution Date with respect to the Class
A-1 Cap Agreement, (B) any excess of the sum of the Net WAC Rate Carryover
Amounts, if any, with respect to the Group II Senior Certificates for such
Distribution Date over any amounts on deposit in the Reserve Fund on such
Distribution Date with respect to the Class A-2/3/4 Cap Agreement, and (C) any
excess of the sum of the Net WAC Rate Carryover Amounts, if any, with respect to
the Mezzanine Certificates and the Class B Certificates for such Distribution
Date over any amounts on deposit in the Reserve Fund on such Distribution Date
with respect to the Subordinate Cap Agreement and (y) any amounts deposited in
the Reserve Fund pursuant to this Section 4.01(d)(i)(s) that were not
distributed on prior Distribution Dates (or, if no Net WAC Rate Carryover
Amounts are payable to such Classes of Certificates on such Distribution Date,
to the Reserve Fund, an amount such that when added to other amounts already on
deposit in the Reserve Fund, the aggregate amount on deposit therein is equal to
$1,000);
(t) if such Distribution Date follows the Prepayment Period during which occurs
the latest date on which a Prepayment Charge may be required to be paid in
respect of any Mortgage Loans, to REMIC PX, as holder of the Class P Interest,
in reduction of the Uncertificated Principal Balance thereof, until the
Uncertificated Principal Balance thereof is reduced to zero;
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(u) to REMIC CX, as holder of the Class C Interest, the Monthly Interest
Distributable Amount for the Class C Interest plus, until the Uncertificated
Principal Balance of the Class C Interest is reduced to zero, any
Overcollateralization Release Amount for such Distribution Date (in both cases,
net of such portion of amounts payable pursuant to this clause (u) that were
paid pursuant to clause (s) above); and
(v) any remaining amounts to the Class R Certificates (in respect of the
appropriate Class R-2 Interest).
(ii) On each Distribution Date, after making the distributions of the Available
Funds as provided in this Section 4.01 and after depositing in the Reserve Fund
any payments received under the Cap Agreements, the Trustee shall withdraw from
the Reserve Fund the amounts on deposit therein and shall distribute such
amounts in the following order of priority:
(i) first, concurrently, (A) amounts in the Reserve Fund received with respect
to the Class A-1 Cap Agreement shall be distributed to the Class A-1
Certificates, up to the amount of the related Net WAC Rate Carryover Amount, (B)
amounts in the Reserve Fund received with respect to the Class A-2/3/4 Cap
Agreement shall be distributed to the Group II Senior Certificates, up to the
amount of the related Net WAC Rate Carryover Amount, allocated among the Group
II Senior Certificates, pro rata, based on their Certificate Principal Balances,
and (C) amounts in the Reserve Fund received with respect to the Subordinate Cap
Agreement shall be distributed to the Mezzanine Certificates and the Class B
Certificates, up to the amount of the related Net WAC Rate Carryover Amount,
allocated among the Mezzanine Certificates and the Class B Certificates, pro
rata, based on their Certificate Principal Balances, in each case, to the extent
of amounts received with respect to the related Cap Agreement remaining in the
Reserve Fund.
(ii) second, amounts deposited in the Reserve Fund pursuant to Section
4.01(d)(i)(s) will be distributed to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates, up to the amount of the related Net
WAC Rate Carryover Amount to the extent not paid pursuant to Section
4.01(d)(ii)(i), allocated among the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates, pro rata, based on their Certificate
Principal Balances, to the extent of such amounts remaining in the Reserve Fund.
On the Distribution Date on which the Certificate Principal Balance of the Class
A-1 Certificates has been reduced to zero, after making all other distributions
on such Distribution Date (including to the Class A Certificates, the Mezzanine
Certificates and the Class B Certificates out of the Reserve Fund), the Trustee
shall distribute to itself all remaining amounts on deposit in Portion 1 of the
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Reserve Fund which were deposited in the Reserve Fund on account of the Class
A-1 Cap Agreement. On the Distribution Date on which the Certificate Principal
Balance of the Group II Senior Certificates has been reduced to zero, after
making all other distributions on such Distribution Date (including to the Class
A Certificates, the Mezzanine Certificates and the Class B Certificates out of
the Reserve Fund), the Trustee shall distribute to itself all remaining amounts
on deposit in Portion 1 of the Reserve Fund which were deposited in the Reserve
Fund on account of the Class A-2/3/4 Cap Agreement. On the Distribution Date on
which the Certificate Principal Balance of the Mezzanine Certificates and the
Class B Certificates has been reduced to zero, after making all other
distributions on such Distribution Date (including to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates out of the Reserve
Fund), the Trustee shall distribute to itself all remaining amounts on deposit
in Portion 1 of the Reserve Fund which were deposited in the Reserve Fund on
account of the Subordinate Cap Agreement. On the Distribution Date on which the
Trustee has distributed to itself all remaining amounts on deposit in Portion 1
of the Reserve Fund, the Trustee shall distribute all remaining amounts in
Portion 2 of the Reserve Fund to the Class C Certificates.
(iii) On each Distribution Date, all amounts representing Prepayment Charges in
respect of the Mortgage Loans received during the related Prepayment Period
shall be withdrawn from the Distribution Account and distributed by the Trustee
to the Class P Interest, and shall not be available for distribution to any
other Class of Certificates. On each Distribution Date, all amounts representing
any Master Servicer Prepayment Charge Payment Amounts paid by or collected by
the Master Servicer during the related Prepayment Period will be withdrawn from
the Distribution Account and distributed by the Trustee to the Class P Interest,
and shall not be available for distribution to any other Class of Certificates.
The payment of the foregoing amounts in respect of such Regular Interests shall
not reduce the Uncertificated Principal Balance thereof.
(e) Without limiting the provisions of Section 9.01(b), by acceptance of the
Class R Certificates the Holders of the Class R Certificates agree, and it is
the understanding of the parties hereto, for so long as any of the NIM Notes are
outstanding, to pledge their rights to receive any amounts otherwise
distributable to the Holders of the Class R Certificates (and such rights are
hereby assigned and transferred) to the Holders of the Class C Certificates to
be paid to the Holders of the Class C Certificates. By acceptance of the Class R
Certificates, the Holders of the Class R Certificates direct the Trustee to pay
any amounts due to the Holders of the Class R Certificates on the first
Distribution Date to the Holders of the Class C Certificates.
(f) All distributions made with respect to each Class of Certificates on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Payments in
respect of each Class of Certificates on each Distribution Date will be made to
the Holders of the respective Class of record on the related Record Date (except
as otherwise provided in this Section 4.01 or Section 9.01 respecting the final
distribution on such Class), based on the aggregate Percentage Interest
represented by their respective Certificates, and shall be made by wire transfer
of immediately available funds to the account of any such Holder at a bank or
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other entity having appropriate facilities therefor, if such Holder shall have
so notified the Trustee in writing at least five Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Certificates having an initial aggregate Certificate Principal Balance
or Notional Amount that is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the Original Class Certificate Principal Balance or Original Class
Notional Amount of such Class of Certificates, or otherwise by check mailed by
first class mail to the address of such Holder appearing in the Certificate
Register. The final distribution on each Certificate shall be made in like
manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Trustee or such other location specified in the
notice to Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of the Trustee, the Depositor, the Master Servicer or the
Seller shall have any responsibility therefor except as otherwise provided by
applicable law.
(g) The rights of the Certificateholders to receive distributions in respect of
the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. None of the Holders of
any Class of Certificates, the Trustee or the Master Servicer shall in any way
be responsible or liable to the Holders of any other Class of Certificates in
respect of amounts properly previously distributed on the Certificates.
(h) Except as otherwise provided in Section 9.01, whenever the Trustee expects
that the final distribution with respect to any Class of Certificates shall be
made on the next Distribution Date, the Trustee shall, no later than three (3)
days before the related Distribution Date, mail to the NIMS Insurer and 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 such Class
of Certificates will be made on such Distribution Date but only upon
presentation and surrender of such Certificates at the office of the Trustee
therein specified, and
(ii) no interest shall accrue on such Certificates from and after the end of the
related Accrual Period.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust by
the Trustee and credited to the account of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 4.01(h) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to the remaining
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non-tendering Certificateholders concerning surrender of their Certificates but
shall continue to hold any remaining funds for the benefit of non-tendering
Certificateholders. The costs and expenses of maintaining the funds in trust and
of contacting such Certificateholders shall be paid out of the assets remaining
in such trust fund. If within one year after the final notice any such
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to Deutsche Bank Securities Inc. and UBS Securities LLC, equally, all such
amounts, and all rights of non-tendering Certificateholders in or to such
amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(h).
(i) Notwithstanding anything to the contrary herein, (i) in no event shall the
Certificate Principal Balance of a Mezzanine Certificate or a Class B
Certificate be reduced more than once in respect of any particular amount both
(a) allocated to such Certificate in respect of Realized Losses pursuant to
Section 4.06 and (b) distributed to such Certificate in reduction of the
Certificate Principal Balance thereof pursuant to this Section 4.01, and (ii) in
no event shall the Uncertificated Principal Balance of a REMIC Regular Interest
be reduced more than once in respect of any particular amount both (a) allocated
to such REMIC Regular Interest in respect of Realized Losses pursuant to Section
4.06 and (b) distributed on such REMIC Regular Interest in reduction of the
Uncertificated Principal Balance thereof pursuant to Section 4.05.
(j) Any amounts distributed to REMIC CX on any Distribution Date in respect of
the Class C Interest under Section 4.01(d)(i) shall, on such Distribution Date,
be distributed by REMIC CX to the Holders of the Class C Certificates. Any
amounts remaining in REMIC CX shall be distributed to the Holders of the Class
R-CX Certificates in respect of the Class R-CX Interest. Any amounts distributed
to REMIC PX on any Distribution Date in respect of the Class P Interest shall,
on such Distribution Date, be distributed by REMIC PX to the Holders of the
Class P Certificates. Any amounts remaining in REMIC PX shall be distributed to
the Holders of the Class R-PX Certificates in respect of the Class R-PX
Interest. For the avoidance of doubt, the provisions of Sections 4.01(f),
4.01(g) and 4.01(h) shall apply to the Class C Certificates and the Class P
Certificates.
Section 4.02 Preference Claims.
The Trustee shall promptly notify the NIMS Insurer of any proceeding or the
institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership or similar law (a "Preference
Claim") of any distribution made with respect to the Class C Certificates or the
Class P Certificates. Each Holder of the Class C Certificates or the Class P
Certificates, by its purchase of such Certificates, the Master Servicer and the
Trustee hereby agree that the NIMS Insurer may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to such Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the NIMS Insurer
shall be subrogated to the rights of the Master Servicer, the Trustee and each
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Holder of the Class C Certificates and the Class P Certificates in the conduct
of any such Preference Claim, including, without limitation, all rights of any
party to an adversary proceeding action with respect to any court order issued
in connection with any such Preference Claim; provided, however, that the NIMS
Insurer will not have any rights with respect to any Preference Claim set forth
in this paragraph unless the Trustee, as indenture trustee with respect to the
Insured NIM Notes or the holder of any Insured NIM Notes has been required to
relinquish a distribution made on the Class C Certificates, the Class P
Certificates or the Insured NIM Notes, as applicable, and the NIMS Insurer made
a payment in respect of such relinquished amount.
Section 4.03 Statements.
(a) On each Distribution Date, based, as applicable, on information provided to
it by the Master Servicer, the Trustee shall prepare and make available by
electronic medium (as set forth in the penultimate paragraph of this Section
4.03(a)) to each Holder of the Regular Certificates, the Trustee, the Master
Servicer, the NIMS Insurer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to the Holders
of each Class of Regular Certificates, separately identified, allocable to
principal and the amount of the distribution made to the Holders of the Class P
Certificates allocable to Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date to the
Holders of each Class of Regular Certificates (other than the Class P
Certificates), allocable to interest, separately identified;
(iii) the 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 Master
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) reserved;
(vi) the aggregate amount of Advances for the related Due Period;
(vii) the aggregate Stated Principal Balance of the Mortgage Loans at the Close
of Business at the end of the related Due Period;
(viii) the number, aggregate principal balance, weighted average remaining term
to maturity and weighted average Mortgage Rate of the Mortgage Loans as of the
related Determination Date;
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(ix) the number and aggregate unpaid principal balance of Mortgage Loans (a)
delinquent 30-59 days, (b) delinquent 60-89 days, (c) delinquent 90 or more days
in each case, as of the last day of the preceding calendar month provided,
however that any aggregate unpaid principal balance of Mortgage Loans shall be
reported as of the last day of the related Due Period, (d) as to which
foreclosure proceedings have been commenced and (e) with respect to which the
related Mortgagor has filed for protection under applicable bankruptcy laws,
with respect to whom bankruptcy proceedings are pending or with respect to whom
bankruptcy protection is in force;
(x) with respect to any Mortgage Loan that became an REO Property during the
preceding Prepayment Period, the unpaid principal balance and the Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(xi) the total number and cumulative principal balance of all REO Properties as
of the Close of Business of the last day of the preceding Prepayment Period;
(xii) the aggregate amount of Principal Prepayments made during the related
Prepayment Period;
(xiii) by Loan Group and in the aggregate, the aggregate amount of Realized
Losses incurred during the related Prepayment Period and the cumulative amount
of Realized Losses;
(xiv) the aggregate amount of Extraordinary Trust Fund expenses withdrawn from
the Collection Account or the Distribution Account for such Distribution Date;
(xv) the Certificate Principal Balance of the Class A Certificates, the
Mezzanine Certificates, the Class B Certificates and the Class C Certificates,
after giving effect to the distributions made on such Distribution Date, and the
Notional Amount of the Class C Certificates, after giving effect to the
distributions made on such Distribution Date;
(xvi) the Monthly Interest Distributable Amount in respect of the Class A
Certificates, the Mezzanine Certificates, the Class B 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 Mezzanine
Certificates and the Class B Certificates for such Distribution Date;
(xvii) the aggregate amount of any Prepayment Interest Shortfalls for such
Distribution Date, to the extent not covered by payments by the Master Servicer
pursuant to Section 3.24, and the aggregate amount of any Relief Act Interest
Shortfalls for such Distribution Date;
(xviii) the Credit Enhancement Percentage for such Distribution Date;
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(xix) the related Net WAC Rate Carryover Amount for the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates, if any, for such
Distribution Date and the amount remaining unpaid after reimbursements therefor
on such Distribution Date;
(xx) the Trustee Fee on such Distribution Date;
(xxi) whether a Stepdown Date or a Trigger Event has occurred;
(xxii) the Available Funds;
(xxiii) the respective Pass-Through Rates applicable to the Class A
Certificates, the Mezzanine Certificates, the Class B Certificates and the Class
C Certificates for such Distribution Date and the Pass-Through Rate applicable
to the Class A Certificates, the Mezzanine Certificates and the Class B
Certificates for the immediately succeeding Distribution Date;
(xxiv) reserved;
(xxv) any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders;
(xxvi) the amount on deposit in the Reserve Fund;
(xxvii) (A) the dollar amount of payments received related to claims under the
PMI Policy during the related Prepayment Period (and the number of Mortgage
Loans to which such payments related) and (B) the aggregate dollar amount of
payments received related to claims under the PMI Policy since the Cut-off Date
(and the number of Mortgage Loans to which such payments related);
(xxviii) (A) the dollar amount of claims made under the PMI Policy that were
denied during the related Prepayment Period (and the number of Mortgage Loans to
which such denials related) and (B) the aggregate dollar amount of claims made
under the PMI Policy that were denied since the Cut-off Date (and the number of
Mortgage Loans to which such denials related);
(xxix) for such Distribution Date, the amount of any payment made by the Cap
Provider under each of the Cap Agreements; and
(xxx) the amount of Subsequent Recoveries and Gross Subsequent Recoveries for
the related Prepayment Period and the cumulative amount of Subsequent Recoveries
and Gross Subsequent Recoveries in the aggregate and for each of Loan Group I
and Loan Group II.
The Trustee shall make such statement (and, at its option, any additional files
containing the same information in an alternative format) available each month
to Certificateholders, the Master Servicer, the NIMS Insurer and the Rating
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Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx. Assistance
in using the website can be obtained by calling the Trustee's customer service
desk at 0-000-000-0000. Parties that are unable to use the above distribution
options are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The 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.
In the case of information furnished pursuant to subclauses (i) through (iii)
above, the amounts shall be expressed in a separate section of the report as a
dollar amount for each Class for each $1,000 original dollar amount as of the
Closing Date.
(b) Within a reasonable period of time after the end of each calendar year, the
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
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 forward to the Holders of the
Residual Certificates and the NIMS Insurer a copy of the reports forwarded to
the Regular Certificateholders in respect of such Distribution Date with such
other information as the 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 Holder of a Residual Certificate, if requested in writing by such Person,
such information as is reasonably necessary to provide to such Person a
statement containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Holder of a Residual Certificate. Such obligation of the
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.
(e) On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.
Section 4.04 Remittance Reports; Advances.
(a) Within one Business Day after each Determination Date, but in no event later
than such date which would allow the Trustee to submit a claim to the NIMS
Insurer under the Indenture, the Master Servicer shall deliver to the NIMS
Insurer and the Trustee by telecopy or electronic mail (or by such other means
as the Master Servicer, the NIMS Insurer and the Trustee, as the case may be,
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may agree from time to time) a Remittance Report with respect to the related
Distribution Date. Not later than each Master Servicer Remittance Date (or, in
the case of certain information, as agreed between the Trustee and the Master
Servicer, not later than four Business Days after the end of each Due Period),
the Master Servicer shall deliver or cause to be delivered to the 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 Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date, plus (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Monthly Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Distribution Account pursuant to Section 3.23 for
distribution on such Distribution Date.
On or before 3:00 p.m. New York time on the Master Servicer Remittance Date, the
Master Servicer shall remit in immediately available funds to the 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 Master Servicer in discharge of any
such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Master Servicer with
respect to the Mortgage Loans and REO Properties. Any amounts held for future
distribution and so used shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Collection Account on or before any future Master Servicer Remittance Date to
the extent that the Available Funds for the related Distribution Date
(determined without regard to Advances to be made on the Master Servicer
Remittance Date) shall be less than the total amount that would be distributed
to the Classes of Certificateholders pursuant to Section 4.01 on such
Distribution Date if such amounts held for future distributions had not been so
used to make Advances. The Trustee will provide notice to the NIMS Insurer and
the Master Servicer by telecopy by the close of business on any Master Servicer
Remittance Date in the event that the amount remitted by the Master Servicer to
the Trustee on such date is less than the Advances required to be made by the
Master Servicer for the related Distribution Date.
(c) The obligation of the Master Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to Section
4.04(d) below, and, with respect to any Mortgage Loan, shall continue until the
payment of the Mortgage Loan in full or the recovery of all Liquidation Proceeds
thereon.
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(d) Notwithstanding anything herein to the contrary, no Advance or Servicing
Advance shall be required to be made hereunder by the Master Servicer if such
Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance or Servicing Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the NIMS Insurer, the
Depositor and the Trustee.
Section 4.05 Distributions on the REMIC Regular Interests.
On each Distribution Date, the Trustee shall cause the sum of the Group I
Interest Remittance Amount, Group II Interest Remittance Amount, Group I
Principal Remittance Amount, and the Group II Principal Remittance Amount, 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:
(i) first, to the Holders of REMIC 1 Regular Interests LT1-AA, LT1-A1, LT1-A2,
LT1-A3, LT1-A4, LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7, LT1-B,
LT1-ZZ, pro rata, an amount equal to (A) the Uncertificated Accrued Interest for
each such REMIC 1 Regular 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 1 Regular
Interest LT1-ZZ shall be reduced and deferred when the REMIC 1
Overcollateralized Amount is less than the REMIC 1 Overcollateralization Target
Amount, by the lesser of (x) the amount of such difference and (y) the Maximum
LT1-ZZ Uncertificated Accrued Interest Deferral Amount and such amount will be
payable to the Holders of REMIC 1 Regular Interests LT1-A1, LT1-A2, LT1-A3,
LT1-A4, LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7, LT1-B in the
same proportion as the Extra Principal Distribution Amount is allocated to the
Corresponding Certificates;
(ii) second, to the Holders of REMIC 1 Regular Interest LT1-1SUB, REMIC 1
Regular Interest LT1-1GRP, REMIC 1 Regular Interest LT1-2SUB, REMIC 1 Regular
Interest LT1-2GRP, and REMIC 1 Regular Interest LT1-XX, pro rata, in an amount
equal to (A) the Uncertificated Accrued Interest for each such REMIC 1 Regular
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates;
(iii) third, an amount equal to 50% of the remainder of the Available Funds for
such Distribution Date after the distributions in clauses (i) and (ii),
allocated as follows:
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(a) 98.00% to the Holders of REMIC 1 Regular Interest LT1-AA and REMIC 1 Regular
Interest LT1-P, in that order, until the Uncertificated Principal Balance of
such REMIC 1 Regular Interest is reduced to zero, provided, however, that REMIC
1 Regular Interest LT1-P 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 1 Regular
Interest LT1-P, until $100 has been distributed pursuant to this clause;
(b) to the Holders of REMIC 1 Regular Interests LT1-A1, LT1-A2, LT1-A3, LT1-A4,
LT1-M1, LT1-M2, LT1-M3, LT1-M4, LT1-M5, LT1-M6, LT1-M7 and LT1-B, 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 1 Regular Interests are reduced to zero;
(c) to the Holders of REMIC 1 Regular Interest LT1-ZZ, 1.00% of such remainder,
until the Uncertificated Principal Balance of such REMIC 2 Regular Interest is
reduced to zero; then
(d) any remaining amount to the Holders of the Class R Certificates (in respect
of the Class R-1 Interest);
(iv) fourth, an amount equal to 50% of the remainder of the Available Funds for
such Distribution Date, after the distributions in clauses (i) and (ii),
allocated as follows:
(a) first to the Holders of REMIC 1 Regular Interest LT1-1GRP, REMIC 1 Regular
Interest LT1-1SUB, REMIC 1 Regular Interest LT1-2GRP, and REMIC 1 Regular
Interest LT1-2SUB in such a manner as to keep the Uncertificated Principal
Balance of each REMIC 1 Regular Interest ending with the designation "GRP" equal
to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group (determined as of the current Distribution Date), and the
Uncertificated Principal Balance of each REMIC 1 Regular Interest ending with
the designation "SUB" equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group as of the
current Distribution Date over (y) the Certificate Principal Balance of the
Senior Certificates related to such Loan Group immediately prior to such
Distribution Date (except that if such excess is larger than it was for the
preceding Distribution Date, the least amount of principal shall be distributed
such that the REMIC 1 Subordinated Ratio is maintained); and then to the Holder
of REMIC 1 Regular Interest LT1-XX, in each case until the Uncertificated
Principal Balances of the REMIC 1 Regular Interests have been reduced to zero;
and
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(b) any remaining amount to the Holders of the Class R Certificates (in respect
of the Class R-1 Interest); and
(v) 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 LT1-P. The
payment of the foregoing amounts to the Holders of REMIC 1 Regular Interest
LT1-P shall not reduce the Uncertificated Principal Balance thereof.
Section 4.06 Allocation of Realized Losses.
(a) Prior to each Determination Date, the Master Servicer shall determine as to
each Mortgage Loan and REO Property: (i) the total amount of Realized Losses, if
any, incurred in connection with any Final Recovery Determinations made during
the related Prepayment Period; (ii) whether and the extent to which such
Realized Losses constituted Bankruptcy Losses; and (iii) the respective portions
of such Realized Losses allocable to interest and allocable to principal. Prior
to each Determination Date, the Master Servicer shall also determine as to each
Mortgage Loan: (i) the total amount of Realized Losses, if any, incurred in
connection with any Deficient Valuations made during the related Prepayment
Period; and (ii) the total amount of Realized Losses, if any, incurred in
connection with Debt Service Reductions in respect of Monthly Payments due
during the related Due Period. The information described in the two preceding
sentences that is to be supplied by the Master Servicer shall be evidenced by an
Officers' Certificate delivered to the NIMS Insurer and the Trustee by the
Master Servicer prior to the Determination Date immediately following the end of
(i) in the case of Bankruptcy Losses allocable to interest, the Due Period
during which any such Realized Loss was incurred, and (ii) in the case of all
other Realized Losses, the Prepayment Period during which any such Realized Loss
was incurred.
(b) If on any Distribution Date after giving effect to all Realized Losses
incurred with respect to the Mortgage Loans during or prior to the related Due
Period and distributions of principal with respect to the Class A Certificates,
the Mezzanine Certificates and the Class B Certificates on such Distribution
Date, the Uncertificated Principal Balance of the Class C Interest is equal to
zero, Realized Losses equal to the Undercollateralized Amount shall be allocated
by the Trustee on such Distribution Date as follows: first, to the Class B
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero, second, to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero, third, to the Class M-6 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero,
fourth, to the Class M-5 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, fifth, to the Class M-4 Certificates until the
Certificate Principal Balance thereof has been reduced to zero, sixth, to the
Class M-3 Certificates until the Certificate Principal Balance thereof has been
reduced to zero, seventh, to the Class M-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero, and eighth, 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 the Mezzanine Certificates and the Class B Certificates on any Distribution
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Date shall be so allocated after the actual distributions to be made on such
date as provided in Section 4.01. All references above to the Certificate
Principal Balance of the Mezzanine Certificates and the Class B Certificates
shall be to the Certificate Principal Balance of the Mezzanine Certificates and
the Class B Certificates immediately prior to the relevant Distribution Date,
before reduction thereof by any Realized Losses or increase thereof by any
Subsequent Recoveries, in each case to be allocated to such Mezzanine
Certificates and Class B Certificates on such Distribution Date.
Any allocation of Realized Losses to a Mezzanine Certificate or a Class B
Certificate on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated. No allocations of any
Realized Losses shall be made to the Class A Certificates or the Class P
Certificates. Any Realized Losses that reduce the distributions in respect of
and/or the Uncertificated Principal Balance of the Class C Interest, shall be
allocated by the Trustee to reduce the distributions in respect of and/or the
Certificate Principal Balance of the Class C Certificates.
(c) (i) 50% of all Realized Losses on the Mortgage Loans shall be allocated by
the Trustee on each Distribution Date to the following REMIC 1 Regular Interests
in the specified percentages, as follows:
first, to Uncertificated Accrued Interest payable to the REMIC 1 Regular
Interest LT1-AA and REMIC 1 Regular Interest LT1-ZZ up to an aggregate amount
equal to the REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of the REMIC 1 Regular Interest
LT1-AA and REMIC 1 Regular Interest LT1-ZZ up to an aggregate amount equal to
the REMIC 1 Principal Loss Allocation Amount, 98% and 2%, respectively;
third, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-B and REMIC 1 Regular Interest LT1-ZZ, 98%,
1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1-B has been reduced to zero;
fourth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-M7 and REMIC 1 Regular Interest LT1-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1-M9 has been reduced to zero;
fifth, to the Uncertificated Principal Balances of (i) REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interests LT1-M6 and REMIC 1 Regular Interest LT1-ZZ,
(i) 98%, (ii) 1% and (iii) 1%, respectively, until the Uncertificated Principal
Balances of REMIC 1 Regular Interests LT1-M8 have been reduced to zero;
sixth, to the Uncertificated Principal Balances of (i) REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interests LT1-M5 and REMIC 1 Regular Interest LT1-ZZ,
(i) 98%, (ii) 1% and (iii) 1%, respectively, until the Uncertificated Principal
Balances of REMIC 1 Regular Interests LT1-M7 have been reduced to zero;
seventh, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-4 and REMIC 1 Regular Interest LT1-ZZ, 98%,
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1% and 1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1-M6 has been reduced to zero;
eighth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-M3 and REMIC 1 Regular Interest LT1-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1-M5 has been reduced to zero;
ninth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-M2 and REMIC 1 Regular Interest LT1-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1-M4 has been reduced to zero; and
tenth, to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1-AA, REMIC 1 Regular Interest LT1-M1 and REMIC 1 Regular Interest LT1-ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1-M3 has been reduced to zero.
(ii) 50% of all Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date to REMIC 1 Regular Interest LT1-1GRP, REMIC 1
Regular Interest LT1-1SUB, REMIC 1 Regular Interest LT1-2GRP, REMIC 1 Regular
Interest LT1-2SUB, and REMIC 1 Regular Interest LT1-XX, as follows:
after all distributions have been made on such Distribution Date, Realized
Losses shall be applied in such a manner as to keep the Uncertificated Principal
Balance of each REMIC 1 Regular Interest ending with the designation "GRP" equal
to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group (determined as of the current Distribution Date), and the
Uncertificated Principal Balance of each REMIC 1 Regular Interest ending with
the designation "SUB" equal to 0.01% of the excess of (x) the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group as of the
current Distribution Date over (y) the Certificate Principal Balance of the
Senior Certificates related to such Loan Group immediately prior to such
Distribution Date (except that if such excess is larger than it was for the
preceding Distribution Date, the least amount of Realized Loss shall be
allocated such that the REMIC 1 Subordinated Ratio is maintained); and then to
REMIC 1 Regular Interest LT1-XX.
(d) If on any Distribution Date Allocated Realized Loss Amounts are to be
reinstated due to Subsequent Recoveries, the Allocated Realized Loss Amounts
shall be reinstated by the Trustee on such Distribution Date to increase the
Certificate Principal Balances of the Mezzanine Certificates and the Class B
Certificates in the following order of priority, in each case until the related
Allocated Realized Loss Amount has been reduced to zero: first, to the Class M-1
Certificates, second to the Class M-2 Certificates, third to the Class M-3
Certificates, fourth to the Class M-4 Certificates, fifth to the Class M-5
Certificates, sixth to the Class M-6 Certificates, seventh to the Class M-7
Certificates and eighth to the Class B Certificates. All Subsequent Recoveries
to be allocated to the Certificate Principal Balances of the Mezzanine
Certificates or the Class B Certificates on any Distribution Date shall be so
allocated after the actual distributions to be made on such date as provided in
Section 4.01. All references above to the Certificate Principal Balance of the
Mezzanine Certificates and the Class B Certificates shall be to the Certificate
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Principal Balance of the Mezzanine Certificates and the Class B Certificates
immediately prior to the relevant Distribution Date, before reduction thereof by
any Realized Losses or increase thereof by any Subsequent Recoveries, in each
case to be allocated to the Mezzanine Certificates and the Class B Certificates
on such Distribution Date.
Any Allocated Realized Loss Amounts to be reinstated to a Certificate on any
Distribution Date due to Subsequent Recoveries shall be made by increasing the
Certificate Principal Balance thereof by the amount so reinstated. No
allocations of any Subsequent Recoveries shall be made to the Class A
Certificates or the Class P Certificates.
(e) If on any Distribution Date Subsequent Recoveries occurred in the related
Prepayment Period, the amount of such Subsequent Recoveries shall be allocated
among the REMIC 1 Regular Interests as follows:
(i) 50% of the Subsequent Recoveries from both Loan Groups shall be allocated
among the REMIC 1 Regular Interests in the same proportions and amounts, but in
the reverse order, as Realized Losses were allocated under Section 4.06(c)(i).
(ii) 50% of the Subsequent Recoveries from both Loan Groups shall be allocated
in the same proportions, but in reverse order, as the Realized Losses were
allocated under Section 4.06(c)(ii).
Section 4.07 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee shall comply
with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. In the event the
Trustee does withhold any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
Section 4.08 Commission Reporting.
(a) Within 15 days after each Distribution Date, the Trustee shall, in
accordance with industry standards and applicable regulations, file with the
Commission via the Electronic Data Gathering Analysis and Retrieval system, a
Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an Exhibit thereto. Prior to January 30, in the year
following the year of execution of this Agreement, the Trustee shall file in
accordance with industry standards a Form 15 Suspension Notification with
respect to the Trust Fund, if applicable, unless notified by the Depositor by
January 10 or the preceding Business Day of such year not to file such a Form 15
with respect to the Trust Fund. Prior to March 30, in the year following the
year of execution of this Agreement, the Depositor shall execute and the Trustee
shall file a Form 10-K, in substance conforming to industry standards and
applicable regulations, with respect to the Trust Fund together with the
accompanying certification described below. The Trustee shall provide the Form
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10-K to the Depositor by March 20 (or the preceding Business Day if such day is
not a Business Day) of the year that such Form 10-K is required to be filed. The
Depositor shall execute such Form 10-K and return the original to the Trustee by
March 25 (or the preceding Business Day if such day is not a Business Day). The
Trustee shall prepare, execute, file and deliver on behalf of the Depositor Form
8-Ks required to be filed under the Exchange Act so long as no certification in
respect of such Form 8-K is required by the Commission. The Depositor shall
prepare and the appropriate person shall execute, in accordance with the
Exchange Act or any other applicable law, any certification required under the
Exchange Act or any other applicable law to accompany the Form 10-K or any other
periodic report. The Depositor hereby grants to the Trustee a limited power of
attorney to execute and file each such document on behalf of the Depositor,
provided, however, that the Trustee shall not execute the Form 10-K 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 Fund. The Depositor agrees to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Trustee shall
have no responsibility to file any items other than those specified in this
Section.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Certificates in the aggregate will represent the entire beneficial
ownership interest in the Mortgage Loans and all other assets included in REMIC
1.
The Certificates will be substantially in the forms annexed hereto as Exhibits
A-1 through A-17. The Certificates of each Class will be issuable in registered
form only, in denominations of authorized Percentage Interests as described in
the definition thereof. Each Certificate will share ratably in all rights of the
related Class.
Upon original issue, the Certificates shall be executed by the Trustee and
authenticated and delivered by the Trustee, to or upon the order of the
Depositor. The Certificates shall be executed and attested by manual or
facsimile signature on behalf of the Trustee by an authorized signatory.
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication substantially
in the form provided herein executed by the Trustee by manual signature, and
such certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Book Entry Certificates shall initially be issued as one or more
Certificates held by the Book-Entry Custodian or, if appointed to hold such
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Certificates as provided below, the Depository and registered in the name of the
Depository or its nominee and, except as provided below, registration of the
Book-Entry Certificates may not be transferred by the Trustee except to another
Depository that agrees to hold the Book-Entry Certificates for the respective
Certificate Owners with Ownership Interests therein. The Certificate Owners
shall hold their respective Ownership Interests in and to the Book-Entry
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures. The Trustee is hereby initially appointed as the
Book-Entry Custodian and hereby agrees to act as such in accordance herewith and
in accordance with the agreement that it has with the Depository authorizing it
to act as such. The Book-Entry Custodian may, and if it is no longer qualified
to act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer and if the Trustee is not the
Book-Entry Custodian, the Trustee and any other transfer agent (including the
Depository or any successor Depository) to act as Book-Entry Custodian under
such conditions as the predecessor Book-Entry Custodian and the Depository or
any successor Depository may prescribe, provided that the predecessor Book-Entry
Custodian shall not be relieved of any of its duties or responsibilities by
reason of any such appointment of other than the Depository. If the Trustee
resigns or is removed in accordance with the terms hereof, successor Trustee or,
if it so elects, the Depository shall immediately succeed to its predecessor's
duties as Book-Entry Custodian. The Depositor shall have the right to inspect,
and to obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.
The Trustee, the Master Servicer, the NIMS Insurer and the Depositor may for all
purposes (including the making of payments due on the Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to the Book-Entry Certificates for the purposes of the
exercise by Certificateholders of the rights of Certificateholders hereunder.
The rights of Certificate Owners with respect to the Book-Entry Certificates
shall be limited to those established by law and agreements between such
Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. The Depositor is hereby authorized to
execute and deliver on behalf of the Trust the Letter of Representations to be
submitted on behalf of the Trust to the Depository and to perform the
obligations of the Issuer (as defined in the Letter of Representations)
thereunder. The Trustee is hereby authorized to execute and deliver as agent of
the Trust the Letter of Representations to be submitted on behalf of the Trust
to the Depository and to perform the obligations of the Agent (as defined in the
Letter of Representations) thereunder. Multiple requests and directions from,
and votes of, the Depository as Holder of the Book-Entry Certificates with
respect to any particular matter shall not be deemed inconsistent if they are
made with respect to different Certificate Owners. The Trustee may establish a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and shall give notice to the Depository of such
record date.
If (i)(A) the Depositor advises the Trustee in writing that the Depository is no
longer willing or able to properly discharge its responsibilities as Depository,
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and (B) the Depositor is unable to locate a qualified successor, (ii) the
Depositor notifies the Trustee and the Depository of its intent to terminate the
book-entry system through the Depository and, upon receipt of notice of such
intent from the Depository, the Depository Participants with a position in the
Book Entry Certificates agree to initiate such termination, or (iii) after the
occurrence of a Master Servicer Event of Default, Certificate Owners
representing in the aggregate not less than 51% of the Ownership Interests of
the Book-Entry Certificates advise the Trustee through the Depository, in
writing, that the continuation of a book-entry system through the Depository is
no longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Book-Entry Custodian or the Depository, as applicable,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates. Such Definitive
Certificates will be issued in minimum denominations of $25,000, except that any
beneficial ownership that was represented by a Book-Entry Certificate in an
amount less than $25,000 immediately prior to the issuance of a Definitive
Certificate shall be issued in a minimum denomination equal to the amount
represented by such Book-Entry Certificate. None of the Depositor, the Master
Servicer or the Trustee shall be liable for any delay in the delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates, and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to be
appointed by the Trustee in accordance with the provisions of Section 8.12 a
Certificate Register for the Certificates in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as herein
provided.
(b) No transfer, sale, pledge or other disposition of any Class B Certificate,
Class C Certificate, Class P Certificate or Residual Certificate shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer of any Class B Certificate to be made without
registration under the Securities Act (other than in connection with the initial
sale of the Class B Certificates to the initial purchasers or the initial
issuance thereof), then the Trustee shall refuse to register such transfer
unless it receives (and upon receipt, may conclusively rely upon) a certificate
from the Class B Certificateholder desiring to effect such transfer
substantially in the form attached as Exhibit J-1A hereto and a certificate from
such Class B Certificateholder's prospective transferee substantially in the
form attached as Exhibit J-1B hereto (which in the case of the Book-Entry
Certificates, the Class B Certificateholder and the Class B Certificateholder's
prospective transferee will be deemed to have represented such certification).
In the event of any such transfer of any Class C Certificate, Class P
Certificate or Residual Certificate (other than in connection with (i) the
initial transfer of any Class C Certificate, Class P Certificate or Residual
Certificates by the Depositor to the Seller, (ii) the transfer of any Class C
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Certificate, Class P Certificate or Residual Certificates by the Seller to an
Affiliate of the Seller or to a trust, the depositor of which is an Affiliate of
the Seller, (iii) the transfer of any Class C Certificate, Class P Certificate
or Residual Certificates by an Affiliate of the Seller to one or more entities
sponsored by such Affiliate or to a trust, the depositor of which is one or more
entities sponsored by such Affiliate or (iv) a subsequent transfer of any Class
C Certificates, Class P Certificates or Residual Certificates to the Seller or
its designee by such entity or trust described in clauses (ii) or (iii) above to
which the Certificates were previously transferred in reliance on clauses (ii)
or (iii) above) (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-2) 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-2) 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 B Certificate, Class C
Certificate, Class P Certificate or Residual Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor
and the Trust Fund against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws.
(c) Each Transferee of a Class A Certificate or 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 as defined below, (b) it has
acquired and is holding such Certificate in reliance on Prohibited Transaction
Exemption ("PTE") 91-22 at 56 F.R. 15933 (1991) and Final Authorization Number
(FAN) 97-03E (1996), as such PTE is further amended by XXX 0000-00, 00 X. X.
00000 (November 13, 2000) and PTE 2002-41, 67 F.R. 163 (August 22, 2002) (the
"Exemption"), and that it understands that there are certain conditions to the
availability of the Exemption including that each of the Cap Agreements is an
"eligible yield supplement agreement" within the meaning of PTE 2000-58 and 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. Each transferee of a
Class B Certificate shall be deemed to have represented by its purchase or
holding of such Certificate (or interest therein) that the conditions in clause
(a) or clause (c)(i), (ii) and (iii) have been satisfied.
No transfer of a Class C Certificate, Class P Certificate or Residual
Certificate or any interest therein shall be made to any Plan subject to ERISA
or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets") unless the Depositor,
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the Trustee and the Master Servicer are provided with an Opinion of Counsel
which establishes to the satisfaction of the Depositor, the Trustee and the
Master Servicer that the purchase of such Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Master 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 Master Servicer, the Trustee or
the Trust Fund. Neither an Opinion of Counsel nor any certification will be
required in connection with the (i) initial transfer of any Class C Certificate,
Class P Certificate or Residual Certificates by the Depositor to the Seller,
(ii) the transfer of any Class C Certificate, Class P Certificate or Residual
Certificates by the Seller to an Affiliate of the Seller or to a trust, the
depositor of which is an Affiliate of the Seller, (iii) the transfer of any
Class C Certificates, Class P Certificates or Residual Certificates by an
Affiliate of the Seller to one or more entities sponsored by such Affiliate or
to a trust the depositor of which is one or more entities sponsored by such
Affiliate or (iv) a subsequent transfer of any Class C Certificates, Class P
Certificates or Residual Certificates to the Seller or its designee by such
entity or trust described in clauses (ii) or (iii) above to which the
Certificates were previously transferred in reliance on clauses (ii) or (iii)
above (in which case, the Depositor, the Seller, any such Affiliate and such
entities sponsored by such Affiliate shall have deemed to have represented that
the applicable transferee is not a Plan or a Person investing Plan Assets) and
the Trustee 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 each transferee, the Seller or such an Affiliate.
Each transferee of a Class C Certificate, Class P Certificate or Residual
Certificate shall sign a letter substantially in the form of Exhibit I to
demonstrate its compliance with this Section 5.02(c) (other than in connection
with the (i) initial transfer of any Class C Certificate, Class P Certificate or
Residual Certificates by the Depositor to the Seller, (ii) the transfer of any
Class C Certificate, Class P Certificate or Residual Certificates by the Seller
to an Affiliate of the Seller or to a trust, the depositor of which is an
Affiliate of the Seller, (iii) the transfer of any Class C Certificates, Class P
Certificates or Residual Certificates by an Affiliate of the Seller to one or
more entities sponsored by such Affiliate or to a trust the depositor of which
is one or more entities sponsored by such Affiliate or (iv) a subsequent
transfer of any Class C Certificates, Class P Certificates or Residual
Certificates to the Seller or its designee by such entity or trust described in
clauses (ii) or (iii) above to which the Certificates were previously
transferred in reliance on clauses (ii) or (iii) above).
If any Certificate or any interest therein is acquired or held in violation of
the provisions of the preceding paragraphs, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master Servicer,
the Trustee and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by those parties as a result of that acquisition or
holding.
(d) Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
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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 not be under any liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not permitted
by this Section or for making any distributions due on such Residual Certificate
to the Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to recover
from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made on
such Residual Certificate. Any such distributions so recovered by the Trustee
shall be distributed and delivered by the Trustee to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
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(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 will provide to the Internal Revenue Service, and to
the persons designated in Section 860E(e)(3) of the Code, information needed to
compute the tax imposed under Section 860E(e)(1) of the Code on such transfer.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
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 any of the Other NIM Notes, the Insured NIM Notes
(without giving effect to any insurance policy issued by the NIMS Insurer) or
the Certificates and (ii) an Opinion of Counsel to the effect that such removal
will not cause any REMIC created hereunder to fail to qualify as a REMIC.
(e) Subject to the preceding subsections, upon surrender for registration of
transfer of any Certificate at any office or agency of the Trustee designated
from time to time for such purpose pursuant to Section 8.12, the Trustee shall
execute and authenticate and deliver, in the name of the designated Transferee
or Transferees, one or more new Certificates of the same Class of a like
aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be exchanged for
other Certificates of the same Class with authorized denominations and a like
aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute, authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
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(g) No service charge shall be made for any registration of transfer or exchange
of Certificates of any Class, but the Trustee 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 Trustee 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 Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (ii) there is delivered to the Trustee and the Depositor and (in
the case of a Class C Certificate or Class P Certificate) the NIMS Insurer such
security or indemnity as may be required by them to save each of them, and the
Trust Fund, harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Trustee 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) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Depositor, the Trustee, the NIMS Insurer and any agent
of the Master Servicer, the Depositor, the Trustee or the NIMS Insurer may treat
the Person, including a Depository, in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and for all other purposes whatsoever, and none of the
Master Servicer, the Depositor, the Trustee, the NIMS Insurer nor any agent of
any of them shall be affected by notice to the contrary.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
The Depositor and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed by this
Agreement and undertaken hereunder by the Depositor and the Master Servicer
herein.
Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer.
Subject to the following paragraph, the Depositor will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation. Subject to the following paragraph, the
Master Servicer will keep in full effect its existence, rights and franchises as
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a corporation under the laws of the jurisdiction of its incorporation and its
qualification as an approved conventional seller/servicer for Xxxxxx Xxx or
Xxxxxxx Mac in good standing. The Depositor and the Master Servicer each will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Mortgage Loans and to perform its respective duties under this
Agreement.
The Depositor or the Master Servicer may be merged or consolidated with or into
any Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor or the Master Servicer shall be a party, or any Person succeeding to
the business of the Depositor or the Master Servicer, shall be the successor of
the Depositor or the Master Servicer, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac; and
provided further that the Rating Agencies' ratings of the Other NIM Notes, the
Class A Certificates, the Mezzanine Certificates and the Class B Certificates
and the shadow rating of the Insured NIM Notes (without giving effect to any
insurance policy issued by the NIMS Insurer) in effect immediately prior to such
merger or consolidation will not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from the Rating Agencies to the
Trustee).
Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and
Others.
None of the Depositor, the Master Servicer or any of the directors, officers,
employees or agents of the Depositor or the Master Servicer shall be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Master Servicer or any such person against
any breach of warranties, representations or covenants made herein, or against
any specific liability imposed on the Master Servicer or the Depositor, as
applicable, pursuant hereto, or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer may rely in good faith
on any document of any kind which, prima facie, is properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Master Servicer and any director, officer, employee or agent of the
Depositor or the Master Servicer shall be indemnified and held harmless by the
Trust Fund against any loss, liability or expense incurred in connection with
any legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense relating to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and,
in its opinion, does not involve it in any expense or liability; provided,
however, that each of the Depositor and the Master Servicer may in its
discretion undertake any such action which it may deem necessary or desirable
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with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, unless the
Depositor or the Master Servicer acts without the consent of Holders of
Certificates entitled to at least 51% of the Voting Rights (which consent shall
not be necessary in the case of litigation or other legal action by either to
enforce their respective rights or defend themselves hereunder), the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor and the Master Servicer
shall be entitled to be reimbursed therefor from the Collection Account as and
to the extent provided in Section 3.11, any such right of reimbursement being
prior to the rights of the Certificateholders to receive any amount in the
Collection Account.
The Master Servicer (except the Trustee to the extent it has succeeded the
Master Servicer as required hereunder) indemnifies and holds the Trustee, the
Depositor and the Trust Fund harmless against any and all claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor or the Trust Fund may sustain in any way related to the failure of the
Master Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Master Servicer shall
immediately notify the Trustee, the NIMS Insurer and the Depositor if a claim is
made that may result in such claims, losses, penalties, fines, forfeitures,
legal fees or related costs, judgments, or any other costs, fees and expenses,
and the Master Servicer shall assume (with the consent of the Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Master Servicer, the
Trustee, the Depositor and/or the Trust Fund in respect of such claim. The
provisions of this paragraph shall survive the termination of this Agreement and
the payment of the outstanding Certificates.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that its duties hereunder are no
longer permissible under applicable law or (ii) with the written consent of the
Trustee and the NIMS Insurer and written confirmation from each Rating Agency
(which confirmation shall be furnished to the Depositor and the Trustee) that
such resignation will not cause such Rating Agency to reduce the then current
rating of any of the Other NIM Notes, the Class A Certificates, the Mezzanine
Certificates or the Class B Certificates or the shadow rating of the Insured NIM
Notes (without giving effect to any insurance policy issued by the NIMS
Insurer). Any such determination pursuant to clause (i) of the preceding
sentence permitting the resignation of the Master Servicer shall be evidenced by
an Opinion of Counsel to such effect obtained at the expense of the Master
Servicer and delivered to the Trustee. No resignation of the Master Servicer
shall become effective until the Trustee or a successor servicer reasonably
acceptable to the NIMS Insurer shall have assumed the Master Servicer's
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this
Agreement.
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Except as expressly provided herein, the Master Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, nor delegate to or subcontract with, nor authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Master Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Master Servicer hereunder; provided,
however, that as provided in Section 3.06 hereof, no Sub-Servicer shall be a
third-party beneficiary hereunder and the parties hereto shall not be required
to recognize any Sub-Servicer as an indemnitee under this Agreement. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of the Servicing
Fee and other compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer.
Section 6.05 Rights of the Depositor, the NIMS Insurer and the Trustee in
Respect of the Master Servicer.
The Master Servicer shall afford (and any Sub-Servicing Agreement shall provide
that each Sub-Servicer shall afford) the Depositor, the NIMS Insurer and the
Trustee, upon reasonable notice, during normal business hours, access to all
records maintained by the Master Servicer (and any such Sub-Servicer) in respect
of the Master Servicer's rights and obligations hereunder and access to officers
of the Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor,
the NIMS Insurer and the Trustee its (and any such Sub-Servicer's) most recent
financial statements and such other information relating to the Master
Servicer's capacity to perform its obligations under this Agreement that it
possesses. To the extent such information is not otherwise available to the
public, the Depositor, the NIMS Insurer and the Trustee shall not disseminate
any information obtained pursuant to the preceding two sentences without the
Master Servicer's (or any such Sub-Servicer's) written consent, except as
required pursuant to this Agreement or to the extent that it is necessary to do
so (i) in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor, the NIMS
Insurer, the Trustee or the Trust Fund, and in either case, the Depositor or the
Trustee, as the case may be, shall use, and the NIMS Insurer shall be deemed to
have agreed with the parties hereto to use, its best efforts to assure the
confidentiality of any such disseminated non-public information. The Depositor
may, but is not obligated to, enforce the obligations of the Master Servicer
under this Agreement and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Agreement by virtue of such performance by the Depositor
or its designee. The Depositor shall not have any responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Events of Default.
"Master Servicer Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to remit to the Trustee for distribution
to the Certificateholders any payment (other than an Advance required to be made
from its own funds on any Master Servicer Remittance Date pursuant to Section
4.04) required to be made under the terms of the Certificates and this Agreement
which continues unremedied for a period of one Business Day after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Depositor, the Trustee (in which
case notice shall be provided by telecopy), or to the Master Servicer, the
Depositor and the Trustee by the NIMS Insurer or the Holders of Certificates
entitled to at least 25% of the Voting Rights; or
(ii) any failure on the part of the Master Servicer duly to observe or perform
in any material respect any of the covenants or agreements on the part of the
Master Servicer contained in this Agreement which continues unremedied for a
period of 45 days (30 days in the case of any failure to maintain a
Sub-Servicing Agreement with an eligible Sub-Servicer to the extent required in
accordance with Section 3.02(c)) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Depositor or the Trustee, or to the
Master Servicer, the Depositor and the Trustee by the NIMS Insurer or the
Holders of Certificates entitled to at least 25% of the Voting Rights and (ii)
actual knowledge of such failure by a Servicing Representative of the Master
Servicer; or
(iii) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present or future
federal or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and if such proceeding is being contested by the Master Servicer
in good faith, such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days or results in the entry of an order for relief
or any such adjudication or appointment; or
(iv) the Master Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to it or of or
relating to all or substantially all of its property; or
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(v) the Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors; or
(vi) any failure by the Master Servicer of the Master Servicer Termination Test;
or
(vii) any failure of the Master Servicer to make, or cause an Advancing Person
to make, any Advance on any Master Servicer Remittance Date required to be made
from its own funds pursuant to Section 4.04 which continues unremedied until
3:00 p.m. New York time on the Business Day immediately following the Master
Servicer Remittance Date; or
(viii) the Master Servicer ceases to be an approved seller or servicer of Xxxxxx
Xxx.
If a Master Servicer Event of Default described in clauses (i) through (vi) of
this Section shall occur, then, and in each and every such case, so long as such
Master Servicer Event of Default shall not have been remedied, the Depositor or
the Trustee may, and at the written direction of the NIMS Insurer or the Holders
of Certificates entitled to at least 51% of Voting Rights, the Trustee shall, by
notice in writing to the NIMS Insurer and the Master Servicer (and to the
Depositor if given by the Trustee or to the Trustee if given by the Depositor),
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. If a Master
Servicer Event of Default described in clauses (vii) or (viii) hereof shall
occur, the Trustee shall, by notice in writing to the Master Servicer (delivered
immediately by facsimile and effective on the date of acknowledgement of receipt
in the case of a Master Servicer Event of Default described in clause (vii)),
the NIMS Insurer and the Depositor, terminate all of the rights and obligations
of the Master Servicer in its capacity as Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section and, without limitation, the Trustee is hereby authorized and
empowered, as attorney-in-fact or otherwise, to execute and deliver on behalf of
and at the expense of the Master Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees, at its sole cost
and expense, promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide the Trustee with all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement, and to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights under this Agreement,
including, without limitation, the transfer within one Business Day to the
Trustee for administration by it of all cash amounts which at the time shall be
or should have been credited by the Master Servicer to the Collection Account
held by or on behalf of the Master Servicer, or any REO Account or Servicing
Account held by or on behalf of the Master Servicer or thereafter be received
with respect to the Mortgage Loans or any REO Property (provided, however, that
the Master Servicer shall continue to be entitled to receive all amounts accrued
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or owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Advances or otherwise, and shall continue to be entitled
to the benefits of Section 6.03, notwithstanding any such termination, with
respect to events occurring prior to such termination). For purposes of this
Section 7.01, the Trustee shall not be deemed to have knowledge of a Master
Servicer Event of Default unless a Responsible Officer of Trustee assigned to
and working in the Trustee's Corporate Trust Office has actual knowledge thereof
or unless written notice of any event which is in fact such a Master Servicer
Event of Default is received by the Trustee and such notice references the
Certificates, any of the Trust REMICs or this Agreement.
The Trustee shall be entitled to be reimbursed by the Master Servicer (or by the
Trust Fund if the Master Servicer is unable to fulfill its obligations
hereunder) for all costs associated with the transfer of servicing from the
predecessor master servicer, including without limitation, any costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Trustee to correct any errors or insufficiencies in the servicing data or
otherwise to enable the Trustee to service the Mortgage Loans properly and
effectively.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of termination,
the Trustee shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto and arising thereafter, which shall be assumed
by the Trustee (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.03(c) and its obligation to deposit amounts in respect of
losses pursuant to Section 3.12) by the terms and provisions hereof including,
without limitation, the Master Servicer's obligations to make Advances pursuant
to Section 4.04; provided, however, that if the Trustee is prohibited by law or
regulation from obligating itself to make advances regarding delinquent Mortgage
Loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.04; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 7.01 shall not be considered a default by the Trustee as
successor to the Master Servicer hereunder; provided, however, it is understood
and acknowledged by the parties that there will be a period of transition (not
to exceed 90 days) before the servicing transfer is fully effected. As
compensation therefor, the Trustee shall be entitled to the Servicing Fee and
all funds relating to the Mortgage Loans to which the Master Servicer would have
been entitled if it had continued to act hereunder (other than amounts which
were due or would become due to the Master Servicer prior to its termination or
resignation). Notwithstanding anything herein to the contrary, in no event shall
the Trustee be liable for any Servicing Fee or for any differential in the
amount of the Servicing Fee paid hereunder and the amount necessary to induce
any successor Master Servicer to act as successor Master Servicer under this
Agreement and the transactions set forth or provided for herein. After the
Master Servicer receives a notice of termination, notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
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act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent Mortgage Loans, or if the NIMS Insurer or
the Holders of Certificates entitled to at least 51% of the Voting Rights so
request in writing to the Trustee, promptly appoint, or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency, having a net worth of not less
than $15,000,000 and reasonably acceptable to the NIMS Insurer, as the successor
to the Master Servicer under this Agreement in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer under this
Agreement.
No appointment of a successor to the Master Servicer under this Agreement shall
be effective until the assumption by the successor of all of the Master
Servicer's responsibilities, duties and liabilities hereunder. In connection
with such appointment and assumption described herein, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.
Upon removal or resignation of the Master Servicer, the Trustee, with the
cooperation of the Depositor, (x) shall solicit bids for a successor Master
Servicer as described below and (y) pending the appointment of a successor
Master Servicer as a result of soliciting such bids, shall serve as Master
Servicer of the Mortgage Loans serviced by such predecessor Master Servicer. The
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth in the first paragraph of this Section 7.02 (including
the Trustee or any affiliate thereof). Such public announcement shall specify
that the successor Master Servicer shall be entitled to the servicing
compensation agreed upon between the Trustee, the successor Master Servicer and
the Depositor; provided, however, that no such fee shall exceed the Servicing
Fee. Within thirty days after any such public announcement, the Trustee with the
cooperation of the Depositor, shall negotiate in good faith and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest satisfactory bid as to the price
they will pay to obtain such servicing. The Trustee, upon receipt of the
purchase price shall pay such purchase price to the Master Servicer being so
removed, after deducting from any sum received by the Trustee from the successor
to the Master Servicer in respect of such sale, transfer and assignment all
costs and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities reasonably incurred
hereunder. After such deductions, the remainder of such sum shall be paid by the
Trustee to the Master Servicer at the time of such sale.
(b) If the Master Servicer fails to remit to the Trustee for distribution to the
Certificateholders any payment required to be made under the terms of this
Agreement (for purposes of this Section 7.02(b), a "Remittance") because the
Master Servicer is the subject of a proceeding under the Bankruptcy Code and the
making of such Remittance is prohibited by Section 362 of the Bankruptcy Code,
the Trustee shall upon written notice of such prohibition, regardless of whether
it has received a notice of termination under Section 7.01, shall be treated as
though it had succeeded to the Master Servicer and shall advance the amount of
such Remittance by depositing such amount in the Distribution Account on the
related Distribution Date. The Trustee shall be obligated to make such advance
only if (i) such advance, in the good faith judgment of the Trustee can
reasonably be expected to be ultimately recoverable from Stayed Funds and (ii)
the Trustee is not prohibited by law from making such advance or obligating
itself to do so. Upon remittance of the Stayed Funds to the Trustee or the
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deposit thereof in the Distribution Account by the Master Servicer, a trustee in
bankruptcy or a federal bankruptcy court, the Trustee may recover the amount so
advanced, without interest, by withdrawing such amount from the Distribution
Account; however, nothing in this Agreement shall be deemed to affect the
Trustee's rights to recover from the Master Servicer's own funds interest on the
amount of any such advance. If the Trustee at any time makes an advance under
this Subsection which it later determines in its good faith judgment will not be
ultimately recoverable from the Stayed Funds with respect to which such advance
was made, the Trustee shall be entitled to reimburse itself for such advance,
without interest, by withdrawing from the Distribution Account, out of amounts
on deposit therein, an amount equal to the portion of such advance attributable
to the Stayed Funds.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of the Master Servicer pursuant to Section 7.01 above
or any appointment of a successor to the Master Servicer pursuant to Section
7.02 above, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate
Register and to the NIMS Insurer.
(b) Not later than the later of 60 days after the occurrence of any event, which
constitutes or which, with notice or lapse of time or both, would constitute a
Master Servicer Event of Default or five days after a Responsible Officer of the
Trustee becomes aware of the occurrence of such an event, the Trustee shall
transmit by mail to all Holders of Certificates and to the NIMS Insurer notice
of each such occurrence, unless such default or Master Servicer Event of Default
shall have been cured or waived.
Section 7.04 Waiver of Master Servicer Events of Default.
The Holders representing at least 66% of the Voting Rights evidenced by all
Classes of Certificates affected by any default or Master Servicer Event of
Default hereunder may, with the consent of the NIMS Insurer, waive such default
or Master Servicer Event of Default; provided, however, that a default or Master
Servicer Event of Default under clause (i) or (vii) of Section 7.01 may be
waived only by all of the Holders of the Regular Certificates and the NIMS
Insurer (as evidenced by the written consent of the NIMS Insurer). Upon any such
waiver of a default or Master Servicer Event of Default, such default or Master
Servicer Event of Default shall cease to exist and shall be deemed to have been
remedied for every purpose hereunder. No such waiver shall extend to any
subsequent or other default or Master Servicer Event of Default or impair any
right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of Default and
after the curing of all Master Servicer Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. During a Master Servicer Event of
Default, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.
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. 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 Master Servicer Event of Default, and after the
curing of all such Master Servicer Events of Default which may have occurred,
the duties and obligations of the Trustee 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 that conform to the
requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) 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 NIMS Insurer or the Holders of Certificates entitled to at
least 25% of the Voting Rights relating to the time, method and place of
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conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under 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 conclusively upon and shall be fully
protected in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties and the manner of obtaining
consents and evidencing the authorization of the execution thereof shall be
subject to such reasonable regulations as the Trustee 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 trusts or
powers vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the NIMS Insurer or the Certificateholders, pursuant to the provisions of
this Agreement, unless the NIMS Insurer or such Certificateholders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of a Master Servicer Event of Default (which has not been
cured or waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs;
(iv) 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 Master Servicer Event of Default hereunder and
after the curing of all Master Servicer Events of Default 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 document, unless requested in writing to do so by the NIMS Insurer or the
Holders of Certificates entitled to at least 25% of the Voting Rights; provided,
however, that if the payment within a reasonable time to the Trustee 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
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Trustee by the NIMS Insurer or such Certificateholders, the Trustee may require
reasonable indemnity against such expense, or liability from the NIMS Insurer or
such Certificateholders as a condition to taking any such action;
(vi) The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents custodians,
nominees or attorneys and shall not be responsible for any willful misconduct or
negligence of such agents, custodians, nominees or attorneys (as long as such
agents, custodians, nominees or attorneys are appointed with due and proper
care);
(vii) The Trustee shall not be personally liable for any loss resulting from the
investment of funds held in the Collection Account at the direction of the
Master Servicer pursuant to Section 3.12; and
(viii) Except as otherwise expressly provided herein, none of the provisions of
this Agreement shall require the Trustee to expend or risk its own funds or
otherwise to incur any liability, financial or otherwise, in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers
(not including expenses, disbursements and advances incurred or made by the
Trustee 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) if it shall have reasonable
grounds for believing that repayment of such funds or indemnity satisfactory to
it against such risk or liability is not assured to it.
(b) All rights of action under this Agreement or under any of the Certificates,
enforceable by the Trustee may be enforced by it without the possession of any
of the Certificates, or the production thereof at the trial or other proceeding
relating thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the Holders of such
Certificates, subject to the provisions of this Agreement.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the signature
of the Trustee, the execution and authentication of the Trustee on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.13) shall be taken as
the statements of the Depositor, and the Trustee shall not assume any
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.13) or of the Certificates (other than
execution and authentication of the 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 Depositor of any of the Certificates or of the
proceeds of the Certificates, or for the use or application of any funds paid to
the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer,
other than any funds held by or on behalf of the Trustee in accordance with
Section 3.10.
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Section 8.04 Trustee May Own Certificates.
The Trustee in its individual capacity or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not Trustee and may transact banking and/or trust business with the Seller, the
Depositor, the Master Servicer or their Affiliates.
Section 8.05 Trustee's Fees and Expenses.
(a) On the Closing Date, the Depositor shall pay to the Trustee as specified in
a separate agreement between the Depositor and the Trustee. The Trustee shall
withdraw from the Distribution Account on each Distribution Date and pay to
itself the Trustee Fee for such Distribution Date and one day's interest
earnings (net of losses) on amounts on deposit in the Distribution Account. The
right to receive the Trustee Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Trustee's responsibilities
and obligations under this Agreement.
The Trustee, and any director, officer, employee or agent of the Trustee shall
be indemnified by the Trust Fund and held harmless against any loss, liability
or expense (not including expenses, disbursements and advances 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 (including, without limitation, its obligation to enter into the Cap
Assignment) and duties under this Agreement, other than any loss, liability or
expense (i) in any way relating to the failure of the Master Servicer to perform
its duties and service the Mortgage Loans in compliance with the terms of this
Agreement, (ii) that constitutes a specific liability of the Trustee pursuant to
Section 10.01(c) or (iii) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder, including as a result of a breach of the Trustee's obligations under
Article X hereof. Any amounts payable to the Trustee or any director, officer,
employee or agent of the Trustee in respect of the indemnification provided by
this paragraph (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. Such indemnity shall survive
the termination of this Agreement and the resignation of the Trustee.
As a limitation on the foregoing with respect to certain expenses of the
Trustee, the Trustee shall receive from the Trust Fund amounts with respect to
indemnification for counsel fees and expenses (collectively, "Legal Fees") in
connection with any third-party litigation or other claims alleging violations
of laws or regulations relating to consumer lending and/or servicing of the
Trust Fund (collectively, "Third Party Claims") in an amount not greater than
$25,000 per month, and $600,000 in the aggregate (with amounts in excess of
$25,000 for any month carried-forward to subsequent months, until the $600,000
aggregate maximum is reached). The Trustee shall have no obligation to incur
additional expenses for which reimbursement is limited pursuant to this
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paragraph in excess of the aggregate limit set forth above unless it has
received reasonable security or indemnity for such additional expenses. The
Certificateholders shall hold the Trustee harmless for any consequences to such
Certificateholders resulting from any failure of the Trustee to incur any such
additional expenses in excess of the aforementioned aggregate limit.
(b) Without limiting the Master Servicer's indemnification obligations under
Section 6.03, the Master Servicer agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense resulting from a breach of
the Master Servicer's obligations and duties under this Agreement. Such
indemnity shall survive the termination or discharge of this Agreement and the
resignation or removal of the Trustee. Any payment under this Section 8.05(b)
made by the Master Servicer to the Trustee shall be from the Master 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 a corporation or an association
(other than the Depositor, the Seller, the Master Servicer or any Affiliate of
the foregoing) organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or association publishes reports of conditions at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, 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 trust hereby
created by giving written notice thereof to the NIMS Insurer, the Depositor, the
Master Servicer and the Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee by written
instrument, in duplicate, which instrument shall be delivered to the resigning
Trustee and to the successor Trustee acceptable to the NIMS Insurer and to the
Holders of Certificates entitled to at least 51% of the Voting Rights. A copy of
such instrument shall be delivered to the Certificateholders and the Master
Servicer by the Depositor. If no successor Trustee shall have been so appointed
and have 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 the NIMS Insurer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged 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 NIMS Insurer, may remove the Trustee and the Depositor may
appoint a successor Trustee, acceptable to the NIMS Insurer and to the Holders
of Certificates entitled to at least 51% of the Voting Rights, by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
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removed and to the successor Trustee. A copy of such instrument shall be
delivered to the Certificateholders and the Master Servicer by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting Rights, with
the consent of the NIMS Insurer, may at any time remove the Trustee and appoint
a successor Trustee by written instrument or instruments, in triplicate, signed
by the NIMS Insurer or such Holders, as applicable, or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
NIMS Insurer, the Certificateholders and the Master Servicer by the Depositor.
Any resignation or removal of the Trustee and appointment of a successor Trustee
pursuant to any of the provisions of this Section 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, 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 the like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor Trustee all Mortgage Files
and related documents and statements, as well as all moneys, held by it
hereunder (other than any Mortgage Files at the time held by a Custodian, which
Custodian shall become the agent of any successor Trustee hereunder), and the
Depositor and the predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section 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 ratings of any of the Other NIM Notes
or of any Class of Certificates or of the shadow ratings of the Insured NIM
Notes (without giving effect to any insurance policy issued by the NIMS Insurer)
by any Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in this
Section, the Depositor shall mail notice of the succession of such Trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or converted
or with which it may be consolidated or any corporation or association resulting
from any merger, conversion or consolidation to which the Trustee shall be a
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party, or any corporation or association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of REMIC 1,
or property securing the same may at the time be located, the Master Servicer
and the Trustee, acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
and the NIMS Insurer, to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of REMIC
1, and to vest in such Person or Persons, in such capacity, such title to REMIC
1, or any part thereof and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment or the NIMS Insurer shall not have
approved such appointment within 15 days after the receipt by it of a request so
to do, or in case a Master Servicer Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof. If such appointment is
at the request of the Master Servicer then any expense of the Trustee shall be
deemed a Servicing Advance for all purpose of this Agreement, otherwise it will
be an expense of the Trustee and will be payable out of the Trustee's funds.
In the case of any appointment of a co-trustee or separate trustee pursuant to
this Section 8.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to REMIC 1, or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
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Any separate trustee or co-trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Depositor and the Master Servicer,
appoint one or more Custodians to hold all or a portion of the Mortgage Files as
agent for the Trustee, by entering into a Custodial Agreement. The Trustee shall
initially serve as the Custodian and this Agreement shall serve as the Custodial
Agreement. The appointment of any Custodian may at any time be terminated and a
substitute Custodian appointed therefor upon the reasonable request of the
Master Servicer to the Trustee and the consent of the NIMS Insurer, the consent
to which shall not be unreasonably withheld. The Trustee shall pay any and all
fees and expenses of any Custodian (other than the Washington Mutual Custodian)
in accordance with each Custodial Agreement. Subject to Article VIII hereof, the
Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.01. In no event shall
the appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Trustee hereunder. The Trustee shall at all times remain
responsible under the terms of this Agreement notwithstanding the fact that
certain duties have been assigned to the Custodian (other than the Washington
Mutual Custodian), but only to the extent the Trustee is responsible for its own
acts hereunder. Any documents delivered by the Depositor or the Master Servicer
to a Custodian other than the Trustee, if any, shall be deemed to have been
delivered to the Trustee for all purposes hereunder; and any documents held by
such a Custodian, if any, shall be deemed to be held by the Trustee for all
purposes hereunder. In order to comply with its duties under the U.S. Patriot
Act, the Custodian shall obtain and verify certain information and documentation
from the other parties to this Agreement, including, but not limited to, such
parties' name, address, and other identifying information.
Section 8.12 Appointment of Office or Agency.
The Trustee will appoint an office or agency in the City of New York where the
Certificates may be surrendered for registration of transfer or exchange, and
presented for final distribution, and where notices and demands to or upon the
Trustee in respect of the Certificates and this Agreement may be served. As of
the Closing Date, the Trustee designates its offices located at the office of
Trustee's agent, located at DTC Transfer Agent Services, 00 Xxxxx Xxxxxx,
Xxxxxxxx Xxxx Entrance, Xxx Xxxx, XX 00000 for such purpose.
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Section 8.13 Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Master Servicer and the
Depositor, as of the Closing Date, that:
(i) it is a national banking association duly organized, validly existing and in
good standing under the laws of the United States.
(ii) the execution and delivery of this Agreement, and the performance and
compliance with the terms of this Agreement, will not violate its charter or
bylaws or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets.
(iii) it has the full power and authority to enter into and consummate all
transactions contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and delivered
this Agreement.
(iv) this Agreement, assuming due authorization, execution and delivery by the
Master Servicer and the Depositor, constitutes its valid, legal and binding
obligation, enforceable against it in accordance with the terms hereof, subject
to (A) applicable bankruptcy, insolvency, receivership, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
ARTICLE IX
TERMINATION
Section 9.01 Termination Upon Purchase or Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and responsibilities
under this Agreement of the Depositor, the Master Servicer and the Trustee
(other than the obligations of the Master Servicer to the Trustee pursuant to
Section 8.05 and of the Master Servicer to provide for and the Trustee to make
payments in respect of the REMIC 1 Regular Interests, REMIC 2 Regular Interests
and the Classes of Certificates as hereinafter set forth) shall terminate upon
the payment to the Certificateholders and the deposit of all amounts held by or
on behalf of the Trustee and required hereunder to be so paid or deposited on
the Distribution Date coinciding with or following the earlier to occur of (i)
the purchase by the Terminator (as defined below) of all Mortgage Loans and each
REO Property remaining in REMIC 1 and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
REO Property remaining in REMIC 1; provided, however, that in no event shall the
trust created hereby continue beyond the expiration of 21 years from the death
of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
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hereof. The purchase by the Terminator of all Mortgage Loans and each REO
Property remaining in REMIC 1 shall be at a price (the "Termination Price")
equal to (a) if the Terminator is the Master Servicer, 100% of the aggregate
Stated Principal Balance of all the Mortgage Loans included in REMIC 1 and
accrued interest on the Stated Principal Balance of each such Mortgage Loan at
the applicable Net Mortgage Rate in effect from time to time from the Due Date
as to which interest was last paid by the related Mortgagor or by an advance by
the Master Servicer to but not including the first day of the month in which
such purchase is to be effected, plus the appraised value of each REO Property,
if any, included in REMIC 1, such appraisal to be conducted by an appraiser
selected by the Terminator in its reasonable discretion and (b) if the
Terminator is the NIMS Insurer, the greater of (A) the aggregate Purchase Price
of all the Mortgage Loans included in REMIC 1, plus the appraised value of each
REO Property, if any, included in REMIC 1, such appraisal to be conducted by an
appraiser selected by the Terminator in its reasonable discretion, and (B) the
aggregate fair market value of all of the assets of REMIC 1 (as determined by
the Terminator, as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the third paragraph of this Section 9.01), and
any additional amounts necessary to pay all interest accrued on, as well as
amounts necessary to pay in full the principal balance of, the NIM Notes and any
amounts necessary to reimburse the NIMS Insurer for all amounts paid under the
NIMs insurance policy and any other amounts reimbursable or otherwise payable to
the NIMS Insurer, in each case, with interest thereon at the applicable rate set
forth in the Indenture and to the extent not previously reimbursed or paid.
(b) The Master Servicer shall have the right and, if the Master Servicer does
not exercise such right, the NIMS Insurer, shall have the right (the party
exercising such right, the "Terminator") to purchase all of the Mortgage Loans
and each REO Property remaining in REMIC 1 pursuant to clause (i) of the
preceding paragraph no later than the Determination Date in the month
immediately preceding the Distribution Date on which the Certificates will be
retired; provided, however, that the Terminator may elect to purchase all of the
Mortgage Loans and each REO Property remaining in REMIC 1 pursuant to clause (i)
of the preceding paragraph only if (A) the aggregate Stated Principal Balance of
the Mortgage Loans and each REO Property remaining in the Trust Fund at the time
of such election is equal to or less than 10% of the Cut-off Date Principal
Balance of the Closing Date Mortgage Loans. Additionally, if the Terminator is
the Master Servicer, the Terminator may elect to purchase all of the Mortgage
Loans and each REO Property in REMIC 1 pursuant to clause (i) of the preceding
paragraph only if the Termination Price (A) is equal to or less than the
aggregate fair market value of all of the assets of REMIC 1 (as determined by
the Terminator, as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to Section 9.01(c)) and (B) will result in
distributions on the Certificates sufficient (together with all amounts received
under the Indenture other than on account of the Certificates) to pay all
interest accrued on, as well as amounts necessary to pay in full the principal
balance of, the NIM Notes and any amounts necessary to reimburse the NIMS
Insurer for all amounts paid under the NIMs insurance policy and any other
amounts reimbursable or otherwise payable to the NIMS Insurer, in each case,
with interest thereon at the applicable rate set forth in the Indenture and to
the extent not previously reimbursed or paid (unless the NIMS Insurer consents
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to a lesser Termination Price). By acceptance of the Residual Certificates, the
Holders of the Residual Certificates agree for so long as any NIM Notes are
outstanding, in connection with any termination hereunder, to assign and
transfer any amounts in excess of par, and to the extent received in respect of
such termination, to pay any such amounts to the Holders of the Class C
Certificates.
(c) Notice of the liquidation of the REMIC 1 Regular Interests shall be given
promptly by the Trustee by letter to Certificateholders mailed (a) in the event
such notice is given in connection with the purchase of the Mortgage Loans and
each REO Property by the Terminator, not earlier than the 15th day and not later
than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
specifying (i) the Distribution Date upon which the Trust Fund will terminate
and final payment in respect of the REMIC 1 Regular Interests and the related
Certificates will be made upon presentation and surrender of the related
Certificates at the office of the Trustee therein designated, (ii) the amount of
any such final payment, (iii) that no interest shall accrue in respect of the
REMIC 1 Regular Interests or the related Certificates from and after the Accrual
Period relating to the final Distribution Date therefor and (iv) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee designated in such notice for purposes of such surrender.
The Trustee shall remit to the Master Servicer from such funds deposited in the
Distribution Account (i) any amounts which the Master Servicer would be
permitted to withdraw and retain from the Collection Account pursuant to Section
3.11 and (ii) any other amounts otherwise payable by the Trustee to the Master
Servicer from amounts on deposit in the Distribution Account pursuant to the
terms of this Agreement, in each case prior to making any final distributions
pursuant to Section 9.01(d) below. Upon certification to the Trustee by a
Servicing Representative of the making of such final deposit, the Trustee shall
promptly release or cause to be released to the Terminator the Mortgage Files
for the remaining Mortgage Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
(d) Upon presentation of the Certificates by the Certificateholders on the final
Distribution Date, the Trustee shall distribute to each Certificateholder so
presenting and surrendering its Certificates the amount otherwise distributable
on such Distribution Date in accordance with Section 4.01 in respect of the
Certificates so presented and surrendered. Any funds not distributed to any
Holder or Holders of Certificates being retired on such Distribution Date
because of the failure of such Holder or Holders to tender their Certificates
shall, on such date, be set aside and held in trust by the Trustee and credited
to the account of the appropriate non-tendering Holder or Holders. If any
Certificates as to which notice has been given pursuant to this Section 9.01
shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee shall, directly or through an
agent, mail a final notice to remaining related non-tendering Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the funds in trust and of contacting such Certificateholders shall
be paid out of the assets remaining in the trust funds. If within one year after
the final notice any such Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to Deutsche Bank Securities Inc. and UBS
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Securities LLC, equally, all such amounts, and all rights of non-tendering
Certificateholders in or to such amounts shall thereupon cease. No interest
shall accrue or be payable to any Certificateholder on any amount held in trust
by the Trustee as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.01.
Immediately following the deposit of funds in trust hereunder in respect of the
Certificates, the Trust Fund shall terminate.
Section 9.02 Additional Termination Requirements.
(a) In the event that the Terminator purchases all the Mortgage Loans and each
REO Property or the final payment on or other liquidation of the last Mortgage
Loan or REO Property remaining in REMIC 1 pursuant to Section 9.01, the Trust
Fund shall be terminated in accordance with the following additional
requirements:
(i) The Trustee shall specify the first day in the 90-day liquidation period in
a statement attached to each Trust REMIC's final Tax Return pursuant to Treasury
regulation Section 1.860F-l and shall satisfy all requirements of a qualified
liquidation under Section 860F of the Code and any regulations thereunder with
respect to each Trust REMIC, as evidenced by an Opinion of Counsel delivered to
the Trustee and the Depositor obtained at the expense of the Terminator;
(ii) During such 90-day liquidation period, and at or prior to the time of
making of the final payment on the Certificates, the Trustee shall sell all of
the assets of REMIC 1 to the Terminator for cash; and
(iii) At the time of the making of the final payment on the Certificates, the
Trustee shall distribute or credit, or cause to be distributed or credited, to
the Holders of the Residual Certificates all cash on hand in the Trust Fund
(other than cash retained to meet claims), and the Trust Fund shall terminate at
that time.
(b) At the expense of the Terminator, the Trustee shall prepare or cause to be
prepared the documentation required in connection with the adoption of a plan of
liquidation of each Trust REMIC pursuant to the Section 9.02(a).
(c) By their acceptance of Certificates, the Holders thereof hereby agree to
authorize the Trustee to specify the 90-day liquidation period for each Trust
REMIC, which authorization shall be binding upon all successor
Certificateholders.
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The Trustee shall elect to treat each Trust REMIC as a REMIC under the Code
and, if necessary, under applicable state law. Each such election will be made
on Form 1066 or other appropriate federal tax or information return (including
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Form 8811) or any appropriate state return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued, copies of
which forms and returns shall promptly be furnished by the Trustee to the NIMS
Insurer. For the purposes of the REMIC election in respect of REMIC 1, the REMIC
1 Regular Interests shall be designated as the Regular Interests in REMIC 1 and
the Class R-1 Interest shall be designated as the Residual Interest in REMIC 1.
For the purposes of the REMIC election in respect of REMIC 2, (i) the Regular
Certificates (other than the Class C Certificates and the Class P Certificates)
and the REMIC 2 Regular Interests shall be designated as the Regular Interests
in REMIC 2 and (ii) the Class R-2 Interest shall be designated as the Residual
Interest in REMIC 2. For the purposes of the REMIC election in respect of REMIC
CX, the Class C Certificates shall be designated as the Regular Interests in
REMIC CX and the Class R-CX Interest shall be designated as the Residual
Interest in REMIC CX. For purposes of the REMIC election in respect of REMIC PX,
the Class P Certificates shall be designated as the Regular Interests in REMIC
PX and the Class R-PX Interest shall be designated as the Residual Interest in
REMIC PX. The Trustee shall not permit the creation of any "interests" in REMIC
1, REMIC 2, REMIC CX or REMIC PX (within the meaning of Section 860G of the
Code) other than the REMIC 1 Regular Interests, the REMIC 2 Regular Interests
and the interests represented by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each Trust
REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall pay, out of funds on deposit in the Distribution Account,
any and all expenses relating to any tax audit of the Trust Fund (including, but
not limited to, any professional fees or any administrative or judicial
proceedings with respect to any Trust REMIC that involve the Internal Revenue
Service or state tax authorities) unless such expenses, professional fees or any
administrative or judicial proceedings are incurred by reason of the Trustee's
willful misfeasance, bad faith or negligence. The Trustee, as agent for each
Trust REMIC's tax matters person, shall (i) act on behalf of the Trust Fund in
relation to any tax matter or controversy involving any Trust REMIC and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto and will be entitled to reimbursement from the Trust Fund for any
expenses incurred by the Trustee in connection therewith unless such
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority is incurred by reason of the Trustee's willful
misfeasance, bad faith or negligence. The holder of the largest Percentage
Interest of the Class R Certificates shall be designated, in the manner provided
under Treasury regulations Section 1.860F-4(d) and Treasury regulations Section
301.6231(a)(7)-1, as the tax matters person of each Trust REMIC created
hereunder other than REMIC CX and REMIC PX. The holder of the largest Percentage
Interest of the Class R-CX Certificates shall be designated, in the manner
provided under Treasury regulations Section 1.860F-4(d) and Treasury regulations
Section 301.6231(a)(7)-1, as the tax matters person of REMIC CX. The holder of
the largest Percentage Interest of the Class R-PX Certificates shall be
designated, in the manner provided under Treasury regulations Section
1.860F-4(d) and Treasury regulations Section 301.6231(a)(7)-1, as the tax
matters person of REMIC PX. By its acceptance thereof, each such holder hereby
agrees to irrevocably appoint the Trustee or an Affiliate as its agent to
perform all of the duties of the tax matters person of each respective REMIC.
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(d) The Trustee shall prepare, sign and file in a timely manner, all of the Tax
Returns in respect of each REMIC created hereunder, copies of which Tax Returns
shall be promptly furnished to the NIMS Insurer. The expenses of preparing and
filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
Trust Fund as is in its possession and reasonably required by the Trustee to
enable it to perform its respective obligations under this Article.
(e) The Trustee shall perform on behalf of each Trust REMIC all reporting and
other tax compliance duties that are the responsibility of such REMIC under the
Code, the REMIC Provisions or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
as required by the Code, the REMIC Provisions or such other compliance guidance,
the Trustee shall provide (i) to any Transferor of a Residual Certificate (or
other person designated in Section 860E(e)(3) of the Code) and to the Internal
Revenue Service such information as is necessary for the computation of any tax
relating to the transfer of a Residual Certificate to any Person who is not a
Permitted Transferee, (ii) to the Certificateholders such information or reports
as are required by the Code or the REMIC Provisions including reports relating
to interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of each Trust REMIC. The Master Servicer shall provide on a
timely basis to the Trustee such information with respect to the assets of the
Trust Fund, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable it to perform its
obligations under this subsection. In addition, the Depositor shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates. The Depositor shall also
provide such information or data to the NIMS Insurer.
(f) The Trustee shall take such action and shall cause each Trust REMIC created
hereunder to take such action as shall be necessary to create or maintain the
status thereof as a REMIC under the REMIC Provisions (and the Master Servicer
shall assist the Trustee, to the extent reasonably requested by the Trustee to
do specific actions in order to assist in the maintenance of such status). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any Trust REMIC as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions set forth in Section 860F(a) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee and the NIMS Insurer have
received an Opinion of Counsel, addressed to the Trustee and the NIMS Insurer
(at the expense of the party seeking to take such action but in no event at the
expense of the Trustee) to the effect that the contemplated action will not,
with respect to any Trust REMIC, endanger such status or result in the
imposition of such a tax, nor shall the Master Servicer take or fail to take any
action (whether or not authorized hereunder) as to which the Trustee has advised
it in writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action; provided that the
Master Servicer may conclusively rely on such Opinion of Counsel and shall incur
no liability for its action or failure to act in accordance with such Opinion of
Counsel. The Trustee shall deliver to the NIMS Insurer a copy of any such advice
or opinion. In addition, prior to taking any action with respect to any Trust
REMIC or the assets thereof, or causing any Trust REMIC to take any action,
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which is not contemplated under the terms of this Agreement, the Master Servicer
will consult with the Trustee or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
a Trust REMIC, and the Master Servicer shall not take any such action or cause
any Trust REMIC to take any such action as to which the Trustee has advised it
in writing that an Adverse REMIC Event could occur; provided that the Master
Servicer may conclusively rely on such writing and shall incur no liability for
its action or failure to act in accordance with such writing. The Trustee may
consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not permitted by this Agreement,
but in no event shall such cost be an expense of the Trustee. At all times as
may be required by the Code, the Trustee will ensure that substantially all of
the assets of REMIC 1 will consist of "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(g) If any tax is imposed on prohibited transactions of any Trust REMIC created
hereunder pursuant to Section 860F(a) of the Code, on the net income from
foreclosure property of any such REMIC pursuant to Section 860G(c) of the Code,
or on any contributions to any such REMIC after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or if any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the Trustee pursuant to Section 10.03 hereof, if such tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Article X, (ii) to the Master Servicer pursuant to Section 10.03 hereof, if
such tax arises out of or results from a breach by the Master Servicer of any of
its obligations under Article III or this Article X, or (iii) otherwise against
amounts on deposit in the Distribution Account and shall be paid by withdrawal
therefrom.
(h) On or before April 15 of each calendar year commencing after the date of
this Agreement, the Trustee shall deliver to the Master Servicer, the NIMS
Insurer and each Rating Agency a Certificate from a Responsible Officer of the
Trustee stating the Trustee's compliance with this Article X.
(i) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each Trust REMIC on a calendar year and on an accrual
basis.
(j) Following the Startup Day, the Trustee shall not accept any contributions of
assets to any Trust REMIC other than in connection with any Qualified Substitute
Mortgage Loan delivered in accordance with Section 2.03 unless it shall have
received an Opinion of Counsel to the effect that the inclusion of such assets
in the Trust Fund will not cause any Trust REMIC to fail to qualify as a REMIC
at any time that any Certificates are outstanding or subject any Trust REMIC to
any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(k) Neither the Trustee nor the Master Servicer shall enter into any arrangement
by which any Trust REMIC will receive a fee or other compensation for services
or permit any Trust REMIC to receive any income from assets other than
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"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
Section 10.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition or
sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the
bankruptcy of REMIC 1, (iii) the termination of REMIC 1 pursuant to Article IX
of this Agreement, (iv) a substitution pursuant to Article II of this Agreement
or (v) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement), nor acquire any assets for any Trust REMIC (other than REO Property
acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any
investments in the Collection Account or the Distribution Account for gain, nor
accept any contributions to any Trust REMIC after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03),
unless it and the NIMS Insurer have received an Opinion of Counsel, addressed to
the Trustee and the NIMS Insurer (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
Trust REMIC as a REMIC or (b) cause any Trust REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.03 Trustee, Master Servicer and Depositor Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor and the Master
Servicer for any taxes and costs including, without limitation, any reasonable
attorneys' fees imposed on or incurred by the Trust Fund, the Depositor or the
Master Servicer as a result of a breach of the Trustee's covenants set forth in
this Article X or any state, local or franchise taxes imposed upon the Trust as
a result of the location of the Trustee.
(b) The Master Servicer agrees to indemnify the Trust Fund, the Depositor and
the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the
Depositor or the Trustee as a result of a breach of the Master Servicer's
covenants set forth in Article III or this Article X or any state, local or
franchise taxes imposed upon the Trust as a result of the location of the Master
Servicer or any subservicer.
(c) The Depositor agrees to indemnify the Trust Fund, the Master Servicer and
the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Master
Servicer or the Trustee as a result of a breach of the Depositor's covenants set
forth in this Article X.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement or any Custodial Agreement may be amended from time to time by
the Depositor, the Master Servicer, the Trustee and, if applicable, the
Custodian, with the consent of the NIMS Insurer, and without the consent of any
of the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
modify or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or in any Custodial Agreement, (iii) to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or desirable to maintain the qualification of the Trust Fund as a
REMIC at all times that any Certificate is outstanding or to avoid or minimize
the risk of the imposition of any tax on the Trust Fund pursuant to the Code
that would be a claim against the Trust Fund, provided that the Trustee, the
NIMS Insurer, the Depositor and the Master Servicer have received an Opinion of
Counsel to the effect that (A) such action is necessary or desirable to maintain
such qualification or to avoid or minimize the risk of the imposition of any
such tax and (B) such action will not adversely affect the status of the Trust
Fund as a REMIC or adversely affect in any material respect the interest of any
Certificateholder or (iv) to make any other provisions with respect to matters
or questions arising under this Agreement or in any Custodial Agreement which
shall not be inconsistent with the provisions of this Agreement or such
Custodial Agreement, provided that, in each case, such action shall not, as
evidenced by an Opinion of Counsel delivered to the parties hereto and the NIMS
Insurer, adversely affect in any material respect the interests of any
Certificateholder and, provided, further, that (A) such action will not affect
in any material respect the permitted activities of the Trust and (B) such
action will not increase in any material respect the degree of discretion which
the Master Servicer is allowed to exercise in servicing the Mortgage Loans. No
amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.
This Agreement or any Custodial Agreement may also be amended from time to time
by the Depositor, the Master Servicer, the Trustee and, if applicable, the
Custodian, with the consent of the NIMS Insurer, and with the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or any Custodial Agreement or of modifying
in any manner the rights of the Holders of Certificates; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner, other than as described in
(i), without the consent of the Holders of Certificates of such Class evidencing
at least 66% of the Voting Rights allocated to such Class, or (iii) modify the
consents required by the immediately preceding clauses (i) and (ii) without the
consent of the Holders of all Certificates then outstanding. Notwithstanding any
other provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 11.01, Certificates registered in the name of
the Depositor or the Master Servicer or any Affiliate thereof shall be entitled
to Voting Rights with respect to matters affecting such Certificates.
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Notwithstanding any contrary provision of this Agreement, the Trustee and the
NIMS Insurer shall be entitled to receive an Opinion of Counsel to the effect
that such amendment will not result in the imposition of any tax on any Trust
REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee shall furnish a
copy of such amendment to each Certificateholder and the NIMS Insurer.
It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The cost of any Opinion of Counsel to be delivered pursuant to this Section
11.01 shall be borne by the Person seeking the related amendment, but in no
event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any amendment pursuant
to this Section that affects its rights, duties and immunities under this
Agreement or otherwise.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall together constitute but one and the
same instrument.
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
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set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless such Holder previously shall
have given to the 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.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, by facsimile or by express delivery service, to (a)
in the case of the Master Servicer, Long Beach Mortgage Company, 0000 Xxxxx
Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel
(telecopy number: (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the other parties hereto in writing by the Master
Servicer, (b) in the case of the Trustee, Deutsche Bank National Trust Company,
0000 Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: Trust
Administration Services LB0402 (telecopy number (000) 000-0000) or such other
address or telecopy number as may hereafter be furnished to the other parties
hereto in writing by the Trustee, (c) in the case of the Depositor, Long Beach
Securities Corp., 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000, Attention: General Counsel (telecopy number: (000) 000-0000), or such
other address or telecopy number as may be furnished to the other parties hereto
in writing by the Depositor, and (d) in the case of the NIMS Insurer, the NIMS
Insurer's address or telecopy number as set forth in the Indenture, or such
other addresses or telecopy number as may be furnished to the other parties
thereto in writing by the NIMS Insurer. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
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prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Master Servicer default shall be given by telecopy and by
certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
Section 11.07 Notice to the Rating Agencies and the NIMS Insurer.
The Trustee shall use its best efforts promptly to provide notice to the Rating
Agencies and the NIMS Insurer with respect to each of the following of which it
has actual knowledge:
1. Any amendment to this Agreement;
2. The occurrence of any Master Servicer Event of Default that has not been
cured or waived;
3. The resignation or termination of the Master Servicer or the Trustee;
4. The repurchase or substitution of Mortgage Loans pursuant to or as
contemplated by Section 2.03;
5. The final payment to the Holders of any Class of Certificates;
6. Any change in the location of the Collection Account or the Distribution
Account;
7. The Trustee were it to succeed as Master Servicer, is unable to make advances
regarding delinquent Mortgage Loans; and
8. The filing of any claim under the Master Servicer's blanket bond and errors
and omissions insurance policy required by Section 3.14 or the cancellation or
material modification of coverage under any such instrument.
In addition, the Trustee shall promptly make available to each Rating Agency
copies of each Statement to Certificateholders described in Section 4.03 hereof
and the Master Servicer shall promptly furnish to each Rating Agency copies of
the following:
1. each annual statement as to compliance described in Section 3.20 hereof;
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2. each annual independent public accountants' servicing report described in
Section 3.21 hereof.
Any such notice pursuant to this Section 11.07 shall be in writing and shall be
deemed to have been duly given if personally delivered or mailed by first class
mail, postage prepaid, or by express delivery service to Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: MBS
Monitoring/Long Beach Mortgage Loan Trust 2004-2; Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Standard & Poor's Rating Services, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the NIMS Insurer at the address
provided in Section 11.05.
In addition, each party hereto agrees that it will furnish or make available to
the NIMS Insurer a copy of any opinions, notices, reports, schedules,
certificates, statements, rating confirmation letters or other information that
are furnished hereunder to the Trustee or the Certificateholders.
Section 11.08 Article and Section References.
All Article and Section references used in this Agreement, unless otherwise
provided, are to articles and sections in this Agreement.
Section 11.09 Third-Party Beneficiaries.
The NIMS Insurer shall be deemed a third-party beneficiary of this Agreement,
and shall be entitled to enforce such rights, in each case, as if it were a
party hereto. Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the NIMS Insurer hereunder (i) shall be suspended
whenever rights of the NIMS Insurer under the Indenture (other than the right to
consent to amendments to the Indenture) are suspended and (ii) except in the
case of any right to indemnification hereunder shall permanently terminate upon
the later to occur of (A) the payment in full of the Insured NIM Notes as
provided in the Indenture and (B) the payment in full to the NIMS Insurer of any
amounts owed to the NIMS Insurer as provided in the Indenture.
Section 11.10 Grant of Security Interest.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans and the other property specified in Section 2.01 by the Depositor
to the Trustee be, and be construed as, a sale and not a pledge to secure a debt
or other obligation of the Depositor. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans or
other property conveyed to the Trustee pursuant to Section 2.01 are held to be
property of the Depositor, then, (a) it is the express intent of the parties
that such conveyance be deemed a pledge of the Mortgage Loans and all other
property conveyed to the Trustee pursuant to Section 2.01 by the Depositor to
the Trustee to secure a debt or other obligation of the Depositor and (b)(1)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York; (2) the conveyance provided for in
Section 2.01 hereof shall be deemed to be a grant by the Depositor to the
Trustee of a security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans and all amounts payable to the holders of
the Mortgage Loans and all other property conveyed to the Trustee pursuant to
Section 2.01 in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
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securities or other property, including without limitation all amounts, other
than investment earnings, from time to time held or invested in the Collection
Account and the Distribution Account, whether in the form of cash, instruments,
securities or other property; (3) the obligations secured by such security
agreement shall be deemed to be all of the Depositor's obligations under this
Agreement, including the obligation to provide to the Certificateholders the
benefits of this Agreement relating to the Mortgage Loans and the Trust Fund;
and (4) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. Accordingly, the
Depositor hereby grants to the Trustee a security interest in the Mortgage Loans
and all other property described in clause (2) of the preceding sentence, for
the purpose of securing to the Trustee the performance by the Depositor of the
obligations described in clause (3) of the preceding sentence. Notwithstanding
the foregoing, the parties hereto intend the conveyance pursuant to Section 2.01
to be a true, absolute and unconditional sale of the Mortgage Loans and assets
constituting the Trust Fund by the Depositor to the Trustee.
159
IN WITNESS WHEREOF, the Depositor, the Master 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.
LONG BEACH SECURITIES CORP.,
as Depositor
By:
Name: Xxxxxxx X Xxxxxxxx
Title: Vice President
LONG BEACH MORTGAGE COMPANY,
as Master Servicer
By:
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By:
Name: Xxxxxxx Xxxxxxx
Title: Associate
STATE OF WASHINGTON )
) ss.:
COUNTY OF KING )
On the _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx X Xxxxxxxx, known to me to be a Vice
President of Long Beach Securities Corp., a Delaware corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
STATE OF WASHINGTON )
) ss.:
COUNTY OF KING )
On the _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx X Xxxxxxxx, known to me to be a
First Vice President of Long Beach Mortgage Company, a corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On the _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx Xxxxx, known to me to be an
Assistant Vice President of Deutsche Bank National Trust Company, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said association, and acknowledged to
me that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the _____ day of _________, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx Xxxxxxx, known to me to be an
Associate of Deutsche Bank National Trust Company, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
EXHIBIT A-1
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 : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : A-1
Assumed Maturity Date : June, 2034
A-1-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
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 first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class A-1 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-1-3
[Reverse of Class A-1 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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 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 duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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
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 : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : A-2
Assumed Maturity Date : June, 2034
A-2-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
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 first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class A-2 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-2-3
[Reverse of Class A-2 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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 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 duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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
CLASS A-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : A-3
Assumed Maturity Date : June, 2034
A-3-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class A-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-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 A-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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-3 Certificate (obtained by
dividing the Denomination of this Class A-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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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-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 A-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 A-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 A-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-3-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class A-3 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-3-3
[Reverse of Class A-3 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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 duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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
CLASS A-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : [____]
Pass-Through Rate : Variable
CUSIP : [____]
Class : A-4
Assumed Maturity Date : June, 2034
A-4-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class A-4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
A-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 A-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master 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-4 Certificate (obtained by
dividing the Denomination of this Class A-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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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-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 A-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 A-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 A-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-4-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class A-4 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
A-4-3
[Reverse of Class A-4 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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 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 duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denomi-nations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES AND THE CLASS A-4 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-1
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-1
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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.
M-1-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-1-3
[Reverse of Class M-1 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-1-7
EXHIBIT A-6
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 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").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-2
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-2
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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.
M-2-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-2 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-2-3
[Reverse of Class M-2 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-2-7
EXHIBIT A-7
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 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").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-3
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-3
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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.
M-3-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-3 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-3-3
[Reverse of Class M-3 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-3-7
EXHIBIT A-8
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO
THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-4
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-4
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
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 Master 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 Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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.
M-4-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-4 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-4-3
[Reverse of Class M-4 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-4-7
EXHIBIT A-9
CLASS M-5 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES AND THE
CLASS M-4 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-5
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-5
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-5 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-5
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-5 Certificate (obtained by
dividing the Denomination of this Class M-5 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-5 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-5 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-5
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-5 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-5-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-5 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-5-3
[Reverse of Class M-5 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-5-7
EXHIBIT A-10
CLASS M-6 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
CLASS M-4 CERTIFICATES AND THE CLASS M-5 CERTIFICATES TO THE EXTENT DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-6
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-6
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-6 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-6
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-6 Certificate (obtained by
dividing the Denomination of this Class M-6 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-6 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-6 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-6
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-6 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-6-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-6 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-6-3
[Reverse of Class M-6 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-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 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-6-7
EXHIBIT A-11
CLASS M-7 CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES AND THE CLASS M-6
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : M-7
Assumed Maturity Date : June, 0000
X-0-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class M-7
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-7 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-7
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class M-7 Certificate (obtained by
dividing the Denomination of this Class M-7 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Long Beach
Securities Corp. (the "Depositor"). The Trust was created pursuant to a Pooling
and Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class M-7 Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Class M-7 Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-7
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class M-7 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
M-7-2
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class M-7 Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
M-7-3
[Reverse of Class M-7 Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
M-7-4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
M-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
M-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.
M-7-7
EXHIBIT A-12
CLASS B CERTIFICATES
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE 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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES
AND THE CLASS M-7 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
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.
B-1
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Initial Certificate Principal Balance of
this Certificate ("Denomination") : $[_______]
Original Class Certificate Principal
Balance of this Class : $[_______]
Percentage Interest : 100.00%
Pass-Through Rate : Variable
CUSIP : [____]
Class : B
Assumed Maturity Date : June, 2034
B-2
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class B
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class B
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Class B Certificate (obtained by dividing
the Denomination of this Class B Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Class B Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class B Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of 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
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 Master 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.
B-3
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Class B Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-4
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class B Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
B-5
[Reverse of Class B Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
B-6
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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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
B-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
B-9
EXHIBIT A-13
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-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS A-3 CERTIFICATES, THE CLASS A-4 CERTIFICATES, THE CLASS
M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS M-3 CERTIFICATES, THE
CLASS M-4 CERTIFICATES, THE CLASS M-5 CERTIFICATES, THE CLASS M-6 CERTIFICATES,
THE CLASS M-7 CERTIFICATES AND THE CLASS B CERTIFICATES TO THE EXTENT DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Original Certificate Principal Balance : $[_______]
Initial Notional Amount of this
Certificate ("Denomination") : $[_______]
Original Notional Amount of this Class : $[_______]
Percentage : 100.00%
Pass-Through Rate : Variable
Class : C
C-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class C
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class 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 Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class C Certificate (obtained
by dividing the Denomination of this Class C Certificate by the Original
Notional Amount) in certain distributions with respect to a Trust consisting
primarily of the Mortgage Loans deposited by Long Beach Securities Corp. (the
"Depositor"). The Trust was created pursuant to a Pooling and Servicing
Agreement dated as of May 1, 2004 (the "Agreement") among the Depositor, Long
Beach Mortgage Company, as master servicer (the "Master Servicer") and Deutsche
Bank National Trust Company, 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
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 Master 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.
C-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class 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.
C-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class C Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
C-4
[Reverse of Class C Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
C-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee, the NIMS Insurer, if
any, and any agent of the Depositor, the Master Servicer, the Trustee or the
NIMS Insurer, if any, may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee, the NIMS Insurer, if any, nor any such agent shall
be affected by any notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
Dated:_______________________
_____________________________________
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
C-8
EXHIBIT A-14
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 : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
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
P-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class P
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting of first lien, fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class 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 Master Servicer or the Trustee referred to
below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Class 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 Long Beach Securities
Corp. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of May 1, 2004 (the "Agreement") among the
Depositor, Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, 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
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 Master 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.
P-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
Reference is hereby made to the further provisions of this Class 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.
P-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class P Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
P-4
[Reverse of Class P Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
P-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee or the NIMS Insurer, if any, may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer, the
Trustee, the NIMS Insurer, if any, nor any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
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.
P-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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
P-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
P-8
EXHIBIT A-15
CLASS R CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
"RESIDUAL INTERESTS" IN TWO SEPARATE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION," AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Percentage Interest : 100.00%
Class : R
X-0
Xxxx Xxxxx Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class R
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer or the Trustee
referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among the Depositor, Long Beach Mortgage Company, as master
servicer (the "Master Servicer") and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the office or agency designated by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
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 Master 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.
R-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
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
Disqualified Organization 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.
R-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class R Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
R-4
[Reverse of Class R Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
R-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee or the NIMS Insurer, if any, may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer, the
Trustee, the NIMS Insurer, if any, nor any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
By acceptance of the Class R Certificates the Holders of the Class R
Certificates agree that for so long as any of the NIM Notes are outstanding or
any amounts are reimbursable or payable to the NIMS Insurer, if any, in
accordance with the terms of the Indenture, in connection with any amounts
distributable to the Holders of the Class R Certificates pursuant to Section
4.01(d)(i)(v) of the Agreement, their rights to receive the amounts so
distributable are assigned and transferred and any such amounts shall be paid by
the Trustee out of the Trust Fund, and to the extent received by the Holders of
the Class R Certificates they shall pay any such amounts, to the Holders of the
Class C Certificates. By acceptance of the Class R Certificates, the Holders of
the Class R Certificates direct the Trustee to pay any amounts due to the
Holders of the Class R Certificates on the first Distribution Date to the
Holders of the Class C Certificates.
R-6
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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
R-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
R-9
EXHIBIT A-16
CLASS R-CX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-CX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION," AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Percentage Interest : 100.00%
Class : R-CX
R-CX-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class R-CX
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer or the Trustee
referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among the Depositor, Long Beach Mortgage Company, as master
servicer (the "Master Servicer") and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the office or agency designated by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
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 Master 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.
R-CX-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
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
Disqualified Organization acquires an Ownership Interest on a Class R-CX
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
R-CX-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class R-CX Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
R-CX-4
[Reverse of Class R-CX Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
R-CX-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee or the NIMS Insurer, if any, may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer, the
Trustee, the NIMS Insurer, if any, nor any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-CX-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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
R-CX-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
R-CX-8
EXHIBIT A-17
CLASS R-PX CERTIFICATES
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-PX CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO A "DISQUALIFIED ORGANIZATION," AS SUCH TERM
IS DEFINED IN SECTION 860E OF THE CODE, SHALL BE MADE.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.
Certificate No. : 1
Cut-off Date : With respect to any Mortgage Loan, May 1, 2004
First Distribution Date : June 25, 2004
Percentage Interest : 100.00%
Class : R-PX
R-PX-1
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
Class R-PX
evidencing the Percentage Interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to the
Trust consisting primarily of a pool of first lien and second lien,
fixed rate and adjustable rate mortgage loans (the "Mortgage Loans")
LONG BEACH SECURITIES CORP., as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Master Servicer or the Trustee
referred to below or any of their respective affiliates.
This certifies that Long Beach Asset Holdings Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Long Beach Securities Corp. (the "Depositor"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among the Depositor, Long Beach Mortgage Company, as master
servicer (the "Master Servicer") and Deutsche Bank National Trust Company, as
trustee (the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the office or agency designated by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
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 Master 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.
R-PX-2
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.
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
Disqualified Organization acquires an Ownership Interest on a Class R-PX
Certificate in violation of the restrictions mentioned above.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized officer of the Trustee.
R-PX-3
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: May __, 2004
LONG BEACH MORTGAGE LOAN TRUST 2004-2
By: DEUTSCHE BANK NATIONAL TRUST COMPANY
not in its individual capacity,
but solely as Trustee
By ___________________________________________
This is one of the Class R-PX Certificates
referenced in the within-mentioned
Agreement
By ________________________________________________
Authorized Signatory of
Deutsche Bank National Trust Company,
as Trustee
R-PX-4
[Reverse of Class R-PX Certificate]
Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates,
Series 2004-2
This Certificate is one of a duly authorized issue of Certificates
designated as Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates,
Series 2004-2 (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 Master Servicer, 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.
R-PX-5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the 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 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 Master Servicer, the Trustee and any agent of the
Depositor, the Master Servicer, the Trustee or the NIMS Insurer, if any, may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Master Servicer, the
Trustee, the NIMS Insurer, if any, nor any such agent shall be affected by any
notice to the contrary.
On any Distribution Date following the date at which the remaining
Stated Principal Balance of the Mortgage Loans and REO Properties is equal to or
less than 10% of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, the Master Servicer or the NIMS Insurer, if any, may purchase, in
whole, from the Trust the Mortgage Loans in the manner and at a purchase price
determined as provided in the Agreement. In the event that no such optional
termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon notice to the 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 and (iii) the Distribution
Date for the Certificates in June, 2034.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
R-PX-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.
I (We) further direct the 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
R-PX-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_______________________________________________________________________________,
for the account of________________________________________________________,
account number_______________________________________________________________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to _____________________________________.
This information is provided by ___________________________________,
the assignee named above, or _____________________________________________,
as its agent.
R-PX-8
EXHIBIT B-1
Form of Class A-1 Cap Agreement
Class A-1 Cap Agreement
19 April 2004
TRANSACTION
To: Long Beach Mortgage Company
Attn: Xxxxxxx Xxxxxxx
Tel: 000-000-000-0000
Fax: 000-000-000-0000
CC: Deutsche Bank Securities
Attn.: Xxxx Xxxxx
Fax 000-000-000-0000
Our Reference: N299288N, N299289N
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Long Beach Mortgage Company, a corporation
organized under the laws of the State of Delaware, and Deutsche Bank AG, New
York branch ("DB") (each a "party" and together "the parties") on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you
and us as to the terms and conditions of the Transaction to which this
Confirmation relates and will constitute a Confirmation subject to the terms and
conditions of the 1992 Master Agreement (Multicurrency - Cross Border) in the
form published by ISDA, which is incorporated by reference hereby, except as
expressly modified herein (the "ISDA Form") but without any Schedule except for
the election of (i) the laws of the State of New York (without reference to
choice of law doctrine other than New York General Obligations Law Section
5-1401) as the governing law, (ii) USD as the Termination Currency; and (iii)
that Party A and Party B will make the representations in Section (a) "Payer
Representations" of Part 2 "Tax Representations" of the Schedule to the ISDA
Form.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
B-1-1
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the
laws of the State of New York, without reference to choice of law doctrine other
than New York General Obligations Law Section 5-1401. Each party irrevocably
agrees that the courts of the State of New York located in the Borough of
Manhattan and the United States District Court for the Southern District of New
York shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Confirmation and for such purposes hereby irrevocably submits to the
jurisdiction of such courts. Each party waives any objection which it may have
now or in the future to the laying of venue of any suit, action or proceeding in
the above courts and agrees not to claim that either court is an inconvenient
forum. Additionally to the fullest extent permitted by applicable law, each
party waives its respective right to jury trial with respect to any suit, action
or proceeding arising under, or in connection with, this Confirmation.
In this Confirmation "Party A" means DB and "Party B" means Long Beach
Mortgage Company.
2. The particular Transaction to which this Confirmation relates is a Rate
Cap, the terms of which are as follows:
Notional Amount: With respect to any Calculation Period, the lesser
of:
(1)As detailed in Schedule A attached hereto for
each Calculation Period, and
(ii)the outstanding Certificate
Principal Balance of the Class A-1
Certificates immediately prior to the
last day of such Calculation Period.
Cap Rate: As detailed in Schedule A attached hereto for each
Calculation Period.
Trade Date: 19 April 2004
Effective Date: 4 May 2004
Termination Date: 25 February 2008.
B-1-2
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Amount: (Premium) USD 792,000, paid by Party B to Party A on the
Fixed Rate Payer Payment Date.
Fixed Rate Payer Payment Date: 4 May 2004
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer Period The 25th of each month, commencing 25 June 2004
End Dates: through and including the Termination Date.
Floating Rate Payer Payment Dates: Two Business Days prior to each Floating Rate
Payer Period End Date
Floating Rate for initial Calculation To be determined
Period:
Floating Rate Option: USD-LIBOR-BBA, provided,
however, that if the Floating Rate
Option for any Calculation Period is
greater than 9.25% then the Floating
Rate Option shall be deemed to be
9.25% for such Calculation Period.
Floating Rate Payer Payment Amount Notional
Amount times the Floating Rate Day
Count Fraction times (Floating Rate
Option minus Cap Rate); provided,
however, that no payment shall be made
by Party A and the Floating Rate Payer
Payment Amount shall be zero if the
Floating Rate Option is less than or
equal to the Cap Rate.
Designated Maturity: 1 month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Floating Rate Payer
Calculation Period.
Rate Cut-off Dates: Inapplicable
B-1-3
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for payment: New York
Calculation Agent: Party A
0.Xxxxxx Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4.Account Details:
Payment to Party A: Account With: Deutsche Bank AG, New York
SWIFT CODE: XXXXXX00
ABA#: 026 003 780
FAVOR OF: Deutsche Bank AG, New York
Account Number: 100440170004
Payments to Party B: Deutsche Bank National Trust Company
ABA# 000000000
LA Asset Backed Account
Acct.# 01419663
Ref: LB0402
Cap payment ref # N299288N, N299289N
5. Offices:
The Office of Party A for the Transaction is New York, NY.
The Office of Party B for the Transaction is Santa Ana, CA.
6. For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or reasonably
requested to allow the other party to make payments under this Transaction
without any deduction or withholding for or on account of any Tax, or with such
deduction or withholding at a reduced rate.
B-1-4
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of specimen
signatures of persons authorized to execute this Confirmation. This document
will be covered by the 3(d) representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the other party
may reasonably request in connection with the Transaction to which this
Confirmation relates. These documents will be covered by the 3(d) representation
of the ISDA Form.
(iii) With respect to Party A only, and as soon as practicable after request,
annual audited financial statements prepared in accordance with generally
accepted accounting principles. These documents will be covered by the 3(d)
representation of the ISDA Form.
7. Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
Attention: Derivative Documentation
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
Email: Xxxxxxxxxx.Xxxxxxxxxxxxx@xx.xxx
Deutsche Bank AG, London Branch
00 Xxxxxxxxxxx, 0xx Xxxxx
XX0X 0XX, Xxxxxx, Xxxxxx Xxxxxxx
Address for notices or communications to Party B:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: LB 0402 Trust Administration
Tel: 000-000-000-0000
Fax: 000-000-000-0000
8. Additional Provisions:
Notwithstanding the terms of Sections 5 and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to appropriate proceedings to return to
Party B or otherwise returns to Party B upon demand of Party B any portion of
such payment, (a) the occurrence of an event described in Section 5(a) of the
ISDA Form with respect to Party B shall not constitute an Event of Default or
Potential Event of Default with respect to Party B as the Defaulting Party and
(b) Party A shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the ISDA Form only as a result of a Termination Event set forth
in either Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form with respect to
Party A as the Affected Party or Section 5(b)(iii) of the ISDA Form with respect
B-1-5
to Party A as the Burdened Party. For purposes of the Transaction to which this
Confirmation relates, Party B's only obligation under Section 2(a)(i) of the
ISDA Form is to pay the Fixed Amount on the Fixed Rate Payer Payment Date.
9. Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other modification of
this Transaction (other than the assignment of the Transaction to be entered
into on the Effective Date among Party A, Party B, Deutsche Bank National Trust
Company, not individually, but solely as Trustee (the "Trustee") under the
Pooling and Servicing Agreement dated 01 May 2004, among Long Beach Securities
Corp., as Depositor (the "Depositor"), Party B, as Master Servicer, and the
Trustee (the "Pooling Agreement") on behalf of Long Beach Mortgage Loan Trust
2004-2 (the "Trust") and the Depositor) shall be permitted by either party
unless each of Xxxxx'x Investors Service, Inc. ("Moody's"), Xxxxx Inc. ("Fitch")
and Standard & Poors Ratings Group, a division of McGraw Hill Companies, Inc
("S&P") has been provided notice of such transfer, amendment or assignment and
confirms in writing (including by facsimile transmission) within five Business
Days after such notice is given that it will not qualify, downgrade, withdraw or
modify its then-current rating of: (i) the Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates, Series 2004-2 (the "Certificates") that were rated
when issued, and (ii) certain net interest margin securities (the "NIMS") if
issued, that may be issued by a separate trust or Cayman Islands company
pursuant to an indenture to be entered into in connection with the NIMS (the
"Indenture") and secured by certain of the Certificates without regard to the
insurance policies issued by the Note Insurer and the Backup Note Insurer (each,
if any, as defined in the Indenture). Furthermore, no such transfer, amendment,
waiver, supplement, assignment or other modification shall be permitted by
either party unless the Note Insurer and the Backup Note Insurer, if any, shall
have been provided notice of the same and the Note Insurer and the Backup Note
Insurer shall have consented thereto; provided that such consent to a transfer
or assignment is not unreasonably withheld. Any transfer, amendment, waiver,
assignment or other modification without the consent of the Note Insurer and the
Backup Note Insurer shall be null and void, provided, however, that the Note
Insurer, if any, shall not have any consent rights hereunder if an Insurer
Default (if any, as defined in the Indenture) has occurred and is continuing and
the Backup Note Insurer, if any, shall not have any consent rights hereunder if
a Backup Note Insurer Default (if any, as defined in the Indenture) has occurred
and is continuing.
10. Proceedings:
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Party B, Deutsche Bank
National Trust Company, not individually, but solely as Trustee under the
Pooling Agreement on behalf of the Trust or the Depositor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy, dissolution or similar law,
for a period of one year and one day following the later of indefeasible payment
in full of the Certificates and NIMS (if any).
B-1-6
11. Set-off:
The provisions for Set-off set forth in Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
12. Rating Agency Downgrade:
Notwithstanding anything else to the contrary herein, in the event that the
short-term unsecured and unsubordinated debt rating of Party A is withdrawn or
reduced below "A-1" by S&P or its short-term unsecured and unsubordinated debt
rating is withdrawn or reduced below "P-1" by Moody's (and together with S&P,
the "Swap Rating Agencies", and such rating thresholds, "Approved Rating
Thresholds"), then within 30 days after such rating withdrawal or downgrade
(unless, within 30 days after such withdrawal or downgrade, each such Swap
Rating Agency has reconfirmed the rating of the Certificates that were rated
when issued and/or the NIMS (if any), without regard to the Insurance Policies,
if any, issued by the Note Insurer and/or the Backup Note Insurer which was in
effect immediately prior to such withdrawal or downgrade), Party A, at its own
expense, shall (i) obtain another entity to replace Party A as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty of, or a
contingent agreement of another person with the Approved Rating Thresholds, to
honor, Party A's obligations under this Agreement, (iii) post collateral which
will be sufficient to restore the immediately prior ratings of the Certificates
that were rated when issued and/or the NIMS (if any), without regard to the
Insurance Policies, if any, issued by the Note Insurer or the Backup Note
Insurer; or (iv) establish any other arrangement satisfactory to each of the
Note Insurer and the Backup Note Insurer (if any) and the applicable Swap Rating
Agency which will be sufficient to restore the immediately prior ratings of the
Certificates that were rated when issued and/or the NIMS (if any), without
regard to the Insurance Policies, if any, issued by the Note Insurer and/or the
Backup Note Insurer.
13. Additional Termination Events:
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 days, complied with Section 12 above,
then an Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such an Additional
Termination Event. For the avoidance of doubt, this Additional Termination Event
will only occur upon the written designation of an Early Termination Date with
respect thereto by Party B.
14. Amendment to the ISDA Form:
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The "Breach of Agreement,"
"Misrepresentation," "Default Under Specified Transaction," "Cross Default" and
"Credit Event Upon Merger" provisions in Sections 5(a)(ii), 5(a)(iii), 5(a)(iv),
5(a)(v), 5(a)(vi) and 5(b)((iv), and clause (2) in the "Bankruptcy" provisions
in Section 5(a)(vii) of the ISDA Form shall not apply to either Party A or Party
B. The "Additional Termination Event" provision in Section 5(b)(v) of the ISDA
Form will apply to Part A as set forth in Section 13 hereof.
B-1-7
15. Additional Basic Representations:
In Section 3(a) of the ISDA Form the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi)Organization. It is, in the case of Party B, a corporation organized under
the laws of the State of Delaware. (vii)Eligible Contract Participant. It is an
"eligible contract participant" as defined in Section 1a (12) of the Commodity
Exchange Act (7 U.S.C. 1a), as amended.
Payer Representations. For the purpose of Section 3(e) of the ISDA Form, Party A
will make the following representation and Party B will not make the following
representation:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to
be made by it to the other party under this Agreement.
16. Relationship Between Parties:
Each party will be deemed to represent to the other party on the date on which
it enters into this Transaction or an amendment thereof that:
(i)Each Party is acting for its own account. Each Party has made its own
independent decisions to enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into this Transaction; it being understood that
information and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a recommendation to
enter into this Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of this Transaction.
(ii)It is capable of evaluating and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks of this Transaction. It is also capable of assuming, and
assumes, the financial and other risks of this Transaction.
(iii)The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv)It is aware that each other party to this Agreement and its Affiliates may
from time to time (A) take positions in instruments that are identical or
economically related to this Transaction or (B) have an investment banking or
other commercial relationship with the issuer of an instrument underlying this
Transaction.
B-1-8
17. Definitions:
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Pooling Agreement. In the case of any inconsistency between this
Confirmation and such terms, this Confirmation will prevail.
18. Third Party Beneficiaries:
Each of the Note Insurer and the Backup Note Insurer, if any, is a third party
beneficiary of this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
19. Automatic Early Termination:
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
B-1-9
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at 00-00-0000-0000 (Derivative Documentation). If you have any
questions regarding payments or resets, please contact Derivative Documentation
at 00-00-0000-0000.
We are happy to have completed this transaction with you.
Yours sincerely,
DEUTSCHE BANK AG, NEW YORK BRANCH
By: ________________________
Name:
Title:
Accepted and confirmed as of the date first above written:
Long Beach Mortgage Company
By: ________________________
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
B-1-10
For use with Reference Number N299288N, N299289N
Schedule A
Class A-1
From and
Calculation Period Including To but Excluding Notional Amount ($) Cap Rate (%)
---------------------- ------------ ----------------- ------------------ ---------------
1 5/25/2004 6/25/2004 $930,616,401 6.10%
2 6/25/2004 7/25/2004 $904,844,414 6.31%
3 7/25/2004 8/25/2004 $879,320,939 6.10%
4 8/25/2004 9/25/2004 $854,035,057 6.10%
5 9/25/2004 10/25/2004 $828,977,872 6.31%
6 10/25/2004 11/25/2004 $804,142,722 6.11%
7 11/25/2004 12/25/2004 $779,524,649 6.31%
8 12/25/2004 1/25/2004 $755,120,823 6.11%
9 1/25/2004 2/25/2005 $730,930,404 6.11%
10 2/25/2005 3/25/2005 $706,958,562 6.77%
11 3/25/2005 4/25/2005 $683,582,408 6.11%
12 4/25/2005 5/25/2005 $660,805,568 6.32%
13 5/25/2005 6/25/2005 $638,613,118 6.11%
14 6/25/2005 7/25/2005 $616,990,118 6.32%
15 7/25/2005 8/25/2005 $595,921,943 6.12%
16 8/25/2005 9/25/2005 $575,394,442 6.12%
17 9/25/2005 10/25/2005 $555,393,791 6.32%
18 10/25/2005 11/25/2005 $535,906,536 6.12%
19 11/25/2005 12/25/2005 $516,919,430 6.32%
20 12/25/2005 1/25/2006 $498,419,685 6.12%
21 1/25/2006 2/25/2006 $480,394,812 6.12%
22 2/25/2006 3/25/2006 $462,832,976 7.52%
23 3/25/2006 4/25/2006 $445,797,244 6.82%
24 4/25/2006 5/25/2006 $429,200,341 7.06%
25 5/25/2006 6/25/2006 $413,024,177 6.83%
26 6/25/2006 7/25/2006 $397,261,590 7.06%
27 7/25/2006 8/25/2006 $381,902,014 6.83%
28 8/25/2006 9/25/2006 $366,935,423 7.48%
29 9/25/2006 10/25/2006 $352,406,559 7.77%
30 10/25/2006 11/25/2006 $338,250,366 7.52%
31 11/25/2006 12/25/2006 $324,455,364 7.77%
32 12/25/2006 1/25/2007 $311,011,884 7.52%
33 1/25/2007 2/25/2007 $297,910,954 7.52%
34 2/25/2007 3/25/2007 $285,144,048 9.07%
35 3/25/2007 4/25/2007 $272,745,383 8.26%
36 4/25/2007 5/25/2007 $260,665,598 8.53%
37 5/25/2007 6/25/2007 $260,665,598 8.26%
38 6/25/2007 7/25/2007 $260,665,598 8.53%
39 7/25/2007 8/25/2007 $260,665,598 8.26%
40 8/25/2007 9/25/2007 $260,665,598 8.91%
41 9/25/2007 10/25/2007 $260,665,598 9.25%
42 10/25/2007 11/25/2007 $258,028,369 8.95%
43 11/25/2007 12/25/2007 $251,450,355 9.25%
44 12/25/2007 1/25/2008 $245,039,021 8.95%
45 1/25/2008 2/25/2008 $238,790,146 8.95%
X-0-00
XXXXXXX X-0
Form of Class A-2/3/4 Cap Agreement
Class A-2 Cap Agreement
19 April 2004
TRANSACTION
To: Long Beach Mortgage Company
Attn: Xxxxxxx Xxxxxxx
Tel: 000-000-000-0000
Fax: 000-000-000-0000
CC: Deutsche Bank Securities
Attn.: Xxxx Xxxxx
Fax 000-000-000-0000
Our Reference: N299270N, N299292N
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Long Beach Mortgage Company, a corporation
organized under the laws of the State of Delaware, and Deutsche Bank AG, New
York branch ("DB") (each a "party" and together "the parties") on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you and
us as to the terms and conditions of the Transaction to which this Confirmation
relates and will constitute a Confirmation subject to the terms and conditions
of the 1992 Master Agreement (Multicurrency - Cross Border) in the form
published by ISDA, which is incorporated by reference hereby, except as
expressly modified herein (the "ISDA Form") but without any Schedule except for
the election of (i) the laws of the State of New York (without reference to
choice of law doctrine other than New York General Obligations Law Section
5-1401) as the governing law, (ii) USD as the Termination Currency; and (iii)
that Party A and Party B will make the representations in Section (a) "Payer
Representations" of Part 2 "Tax Representations" of the Schedule to the ISDA
Form.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
B-2-1
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the laws
of the State of New York, without reference to choice of law doctrine other than
New York General Obligations Law Section 5-1401. Each party irrevocably agrees
that the courts of the State of New York located in the Borough of Manhattan and
the United States District Court for the Southern District of New York shall
have jurisdiction to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Confirmation and for such purposes hereby irrevocably submits to the
jurisdiction of such courts. Each party waives any objection which it may have
now or in the future to the laying of venue of any suit, action or proceeding in
the above courts and agrees not to claim that either court is an inconvenient
forum. Additionally to the fullest extent permitted by applicable law, each
party waives its respective right to jury trial with respect to any suit, action
or proceeding arising under, or in connection with, this Confirmation.
In this Confirmation "Party A" means DB and "Party B" means Long Beach Mortgage
Company.
2. The particular Transaction to which this Confirmation relates is a Rate Cap,
the terms of which are as follows:
Notional Amount: With respect to any Calculation Period, the
lesser of:
(1) As detailed in Schedule A
attached hereto for each
Calculation Period, and
(ii) the aggregate outstanding
Certificate Principal Balance of
the Class X-0, X-0 and A-4
Certificates immediately prior to
the last day of such Calculation
Period.
Cap Rate: As detailed in Schedule A attached hereto
for each Calculation Period.
Trade Date: 19 April 2004
Effective Date: 4 May 2004
Termination Date: 25 February 2008.
B-2-2
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Amount: USD 266,000, paid by Party B to Party A on
(Premium) the Fixed Rate Payer Payment Date.
Fixed Rate Payer Payment Date: 4 May 2004
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer Period The 25th of each month, commencing 25 June
End Dates: 2004 through and including the Termination
Date.
Floating Rate Payer Payment Dates: Two Business Days prior to each Floating
Rate Payer Period End Date
Floating Rate for initial Calculation To be determined
Period:
Floating Rate Option: USD-LIBOR-BBA,
provided, however, that if the
Floating Rate Option for any
Calculation Period is greater than
9.25% then the Floating Rate
Option shall be deemed to be 9.25%
for such Calculation Period.
Floating Rate Payer Payment Amount Notional Amount times the Floating Rate Day
Count Fraction times (Floating Rate Option
minus Cap Rate); provided, however, that no
payment shall be made by Party A and the
Floating Rate Payer Payment Amount shall be
zero if the Floating Rate Option is less
than or equal to the Cap Rate.
Designated Maturity: 1 month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Floating Rate Payer
Calculation Period.
Rate Cut-off Dates: Inapplicable
B-2-3
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for payment: New York
Calculation Agent: Party A
0.Xxxxxx Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4.Account Details:
Payment to Party A: Account With: Deutsche Bank AG, New York
SWIFT CODE: XXXXXX00
ABA#: 026 003 780
FAVOR OF: Deutsche Bank AG, New York
Account Number: 100440170004
Payments to Party B: Deutsche Bank National Trust Company
ABA# 000000000
LA Asset Backed Account
Acct.# 01419663
Ref: LB0402
Cap payment ref # N299270N, N299292N
5. Offices:
The Office of Party A for the Transaction is New York, NY.
The Office of Party B for the Transaction is Santa Ana, CA.
6.For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or reasonably
requested to allow the other party to make payments under this Transaction
without any deduction or withholding for or on account of any Tax, or with such
deduction or withholding at a reduced rate.
B-2-4
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of specimen
signatures of persons authorized to execute this Confirmation. This document
will be covered by the 3(d) representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the other party
may reasonably request in connection with the Transaction to which this
Confirmation relates. These documents will be covered by the 3(d) representation
of the ISDA Form.
(iii) With respect to Party A only, and as soon as practicable after request,
annual audited financial statements prepared in accordance with generally
accepted accounting principles. These documents will be covered by the 3(d)
representation of the ISDA Form.
7. Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
Attention: Derivative Documentation
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
Email: Xxxxxxxxxx.Xxxxxxxxxxxxx@xx.xxx
Deutsche Bank AG, London Branch
00 Xxxxxxxxxxx, 0xx Xxxxx
XX0X 0XX, Xxxxxx, Xxxxxx Xxxxxxx
Address for notices or communications to Party B:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: LB 0402 Trust Administration
Tel: 000-000-000-0000
Fax: 000-000-000-0000
8. Additional Provisions:
Notwithstanding the terms of Sections 5 and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to appropriate proceedings to return to
Party B or otherwise returns to Party B upon demand of Party B any portion of
such payment, (a) the occurrence of an event described in Section 5(a) of the
ISDA Form with respect to Party B shall not constitute an Event of Default or
Potential Event of Default with respect to Party B as the Defaulting Party and
(b) Party A shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the ISDA Form only as a result of a Termination Event set forth
in either Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form with respect to
Party A as the Affected Party or Section 5(b)(iii) of the ISDA Form with respect
B-2-5
to Party A as the Burdened Party. For purposes of the Transaction to which this
Confirmation relates, Party B's only obligation under Section 2(a)(i) of the
ISDA Form is to pay the Fixed Amount on the Fixed Rate Payer Payment Date.
9. Transfer, Amendment and Assignment:
No transfer, amendment, waiver, supplement, assignment or other modification of
this Transaction (other than the assignment of the Transaction to be entered
into on the Effective Date among Party A, Party B, Deutsche Bank National Trust
Company, not individually, but solely as Trustee (the "Trustee") under the
Pooling and Servicing Agreement dated 01 May 2004, among Long Beach Securities
Corp., as Depositor (the "Depositor"), Party B, as Master Servicer, and the
Trustee (the "Pooling Agreement") on behalf of Long Beach Mortgage Loan Trust
2004-2 (the "Trust") and the Depositor) shall be permitted by either party
unless each of Xxxxx'x Investors Service, Inc. ("Moody's"), Xxxxx Inc. ("Fitch")
and Standard & Poors Ratings Group, a division of McGraw Hill Companies, Inc
("S&P") has been provided notice of such transfer, amendment or assignment and
confirms in writing (including by facsimile transmission) within five Business
Days after such notice is given that it will not qualify, downgrade, withdraw or
modify its then-current rating of: (i) the Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates, Series 2004-2 (the "Certificates") that were rated
when issued, and (ii) certain net interest margin securities (the "NIMS") if
issued, that may be issued by a separate trust or Cayman Islands company
pursuant to an indenture to be entered into in connection with the NIMS (the
"Indenture") and secured by certain of the Certificates without regard to the
insurance policies issued by the Note Insurer and the Backup Note Insurer (each,
if any, as defined in the Indenture). Furthermore, no such transfer, amendment,
waiver, supplement, assignment or other modification shall be permitted by
either party unless the Note Insurer and the Backup Note Insurer, if any, shall
have been provided notice of the same and the Note Insurer and the Backup Note
Insurer shall have consented thereto; provided that such consent to a transfer
or assignment is not unreasonably withheld. Any transfer, amendment, waiver,
assignment or other modification without the consent of the Note Insurer and the
Backup Note Insurer shall be null and void, provided, however, that the Note
Insurer, if any, shall not have any consent rights hereunder if an Insurer
Default (if any, as defined in the Indenture) has occurred and is continuing and
the Backup Note Insurer, if any, shall not have any consent rights hereunder if
a Backup Note Insurer Default (if any, as defined in the Indenture) has occurred
and is continuing.
10. Proceedings:
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Party B, Deutsche Bank
National Trust Company, not individually, but solely as Trustee under the
Pooling Agreement on behalf of the Trust or the Depositor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy, dissolution or similar law,
for a period of one year and one day following the later of indefeasible payment
in full of the Certificates and NIMS (if any).
B-2-6
11. Set-off:
The provisions for Set-off set forth in Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
12. Rating Agency Downgrade:
Notwithstanding anything else to the contrary herein, in the event that the
short-term unsecured and unsubordinated debt rating of Party A is withdrawn or
reduced below "A-1" by S&P or its short-term unsecured and unsubordinated debt
rating is withdrawn or reduced below "P-1" by Moody's (and together with S&P,
the "Swap Rating Agencies", and such rating thresholds, "Approved Rating
Thresholds"), then within 30 days after such rating withdrawal or downgrade
(unless, within 30 days after such withdrawal or downgrade, each such Swap
Rating Agency has reconfirmed the rating of the Certificates that were rated
when issued and/or the NIMS (if any), without regard to the Insurance Policies,
if any, issued by the Note Insurer and/or the Backup Note Insurer which was in
effect immediately prior to such withdrawal or downgrade), Party A, at its own
expense, shall (i) obtain another entity to replace Party A as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty of, or a
contingent agreement of another person with the Approved Rating Thresholds, to
honor, Party A's obligations under this Agreement, (iii) post collateral which
will be sufficient to restore the immediately prior ratings of the Certificates
that were rated when issued and/or the NIMS (if any), without regard to the
Insurance Policies, if any, issued by the Note Insurer or the Backup Note
Insurer; or (iv) establish any other arrangement satisfactory to each of the
Note Insurer and the Backup Note Insurer (if any) and the applicable Swap Rating
Agency which will be sufficient to restore the immediately prior ratings of the
Certificates that were rated when issued and/or the NIMS (if any), without
regard to the Insurance Policies, if any, issued by the Note Insurer and/or the
Backup Note Insurer.
13. Additional Termination Events:
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 days, complied with Section 12 above,
then an Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such an Additional
Termination Event. For the avoidance of doubt, this Additional Termination Event
will only occur upon the written designation of an Early Termination Date with
respect thereto by Party B.
14. Amendment to the ISDA Form:
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The "Breach of Agreement,"
"Misrepresentation," "Default Under Specified Transaction," "Cross Default" and
"Credit Event Upon Merger" provisions in Sections 5(a)(ii), 5(a)(iii), 5(a)(iv),
5(a)(v), 5(a)(vi) and 5(b)((iv), and clause (2) in the "Bankruptcy" provisions
in Section 5(a)(vii) of the ISDA Form shall not apply to either Party A or Party
B. The "Additional Termination Event" provision in Section 5(b)(v) of the ISDA
Form will apply to Part A as set forth in Section 13 hereof.
B-2-7
15. Additional Basic Representations:
In Section 3(a) of the ISDA Form the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi) Organization. It is, in the case of Party B, a corporation organized under
the laws of the State of Delaware. (vii) Eligible Contract Participant. It is an
"eligible contract participant" as defined in Section 1a (12) of the Commodity
Exchange Act (7 U.S.C. 1a), as amended.
Payer Representations. For the purpose of Section 3(e) of the ISDA Form, Party A
will make the following representation and Party B will not make the following
representation:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to
be made by it to the other party under this Agreement.
16. Relationship Between Parties:
Each party will be deemed to represent to the other party on the date on which
it enters into this Transaction or an amendment thereof that:
(i) Each Party is acting for its own account. Each Party has made its own
independent decisions to enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into this Transaction; it being understood that
information and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a recommendation to
enter into this Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of this Transaction.
(ii) It is capable of evaluating and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks of this Transaction. It is also capable of assuming, and
assumes, the financial and other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv) It is aware that each other party to this Agreement and its Affiliates may
from time to time (A) take positions in instruments that are identical or
economically related to this Transaction or (B) have an investment banking or
other commercial relationship with the issuer of an instrument underlying this
Transaction.
B-2-8
17. Definitions:
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Pooling Agreement. In the case of any inconsistency between this
Confirmation and such terms, this Confirmation will prevail.
18. Third Party Beneficiaries:
Each of the Note Insurer and the Backup Note Insurer, if any, is a third party
beneficiary of this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
19. Automatic Early Termination:
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
B-2-9
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at 00-00-0000-0000 (Derivative Documentation). If you have any
questions regarding payments or resets, please contact Derivative Documentation
at 00-00-0000-0000.
We are happy to have completed this transaction with you.
Yours sincerely,
DEUTSCHE BANK AG, NEW YORK BRANCH
By: ________________________
Name:
Title:
Accepted and confirmed as of the date first above written:
Long Beach Mortgage Company
By: ________________________
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
B-2-10
For use with Reference Number N299270N, N299292N
Schedule A
Class A-2/3/4
From and
Calculation Period Including To but Excluding Notional Amount ($) Cap Rate (%)
------------------- ----------- ----------------- ------------------- -------------
1 5/25/2004 6/25/2004 $291,936,878 5.80%
2 6/25/2004 7/25/2004 $283,206,137 5.99%
3 7/25/2004 8/25/2004 $274,632,424 5.80%
4 8/25/2004 9/25/2004 $266,210,829 5.81%
5 9/25/2004 10/25/2004 $257,937,307 6.01%
6 10/25/2004 11/25/2004 $249,807,709 5.81%
7 11/25/2004 12/25/2004 $241,818,062 6.01%
8 12/25/2004 1/25/2004 $233,965,218 5.81%
9 1/25/2004 2/25/2005 $226,247,628 5.81%
10 2/25/2005 3/25/2005 $218,666,332 6.45%
11 3/25/2005 4/25/2005 $211,273,510 5.83%
12 4/25/2005 5/25/2005 $204,073,930 6.02%
13 5/25/2005 6/25/2005 $197,062,271 5.83%
14 6/25/2005 7/25/2005 $190,233,676 6.02%
15 7/25/2005 8/25/2005 $183,583,353 5.83%
16 8/25/2005 9/25/2005 $177,106,665 5.84%
17 9/25/2005 10/25/2005 $170,799,327 6.04%
18 10/25/2005 11/25/2005 $164,656,914 5.84%
19 11/25/2005 12/25/2005 $158,674,913 6.04%
20 12/25/2005 1/25/2006 $152,849,213 5.85%
21 1/25/2006 2/25/2006 $147,175,686 5.86%
22 2/25/2006 3/25/2006 $141,650,715 7.34%
23 3/25/2006 4/25/2006 $136,297,788 6.64%
24 4/25/2006 5/25/2006 $131,084,399 6.88%
25 5/25/2006 6/25/2006 $126,003,155 6.66%
26 6/25/2006 7/25/2006 $121,054,163 6.88%
27 7/25/2006 8/25/2006 $116,233,949 6.67%
28 8/25/2006 9/25/2006 $111,539,430 7.43%
29 9/25/2006 10/25/2006 $106,987,473 7.69%
30 10/25/2006 11/25/2006 $102,553,775 7.46%
31 11/25/2006 12/25/2006 $98,235,536 7.71%
32 12/25/2006 1/25/2007 $94,029,272 7.46%
33 1/25/2007 2/25/2007 $89,932,056 7.47%
34 2/25/2007 3/25/2007 $85,941,260 9.13%
35 3/25/2007 4/25/2007 $82,069,746 8.30%
36 4/25/2007 5/25/2007 $78,299,367 8.60%
37 5/25/2007 6/25/2007 $78,299,367 8.32%
38 6/25/2007 7/25/2007 $78,299,367 8.60%
39 7/25/2007 8/25/2007 $78,299,367 8.33%
40 8/25/2007 9/25/2007 $78,299,367 9.08%
41 9/25/2007 10/25/2007 $78,299,367 9.41%
42 10/25/2007 11/25/2007 $78,299,367 9.12%
43 11/25/2007 12/25/2007 $76,830,218 9.42%
44 12/25/2007 1/25/2008 $74,837,382 9.12%
45 1/25/2008 2/25/2008 $72,895,896 9.13%
X-0-00
XXXXXXX X-0
FORM OF SUBORDINATE CAP AGREEMENT
Subordinate Cap Agreement
19 April 2004
TRANSACTION
To: Long Beach Mortgage Company
Attn: Xxxxxxx Xxxxxxx
Tel: 000-000-000-0000
Fax: 000-000-000-0000
CC: Deutsche Bank Securities
Attn.: Xxxx Xxxxx
Fax 000-000-000-0000
Our Reference: N299281N, N299287N
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Long Beach Mortgage Company, a corporation
organized under the laws of the State of Delaware, and Deutsche Bank AG, New
York branch ("DB") (each a "party" and together "the parties") on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
(the "Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation evidences a complete and binding agreement between you and
us as to the terms and conditions of the Transaction to which this Confirmation
relates and will constitute a Confirmation subject to the terms and conditions
of the 1992 Master Agreement (Multicurrency - Cross Border) in the form
published by ISDA, which is incorporated by reference hereby, except as
expressly modified herein (the "ISDA Form") but without any Schedule except for
the election of (i) the laws of the State of New York (without reference to
choice of law doctrine other than New York General Obligations Law Section
5-1401) as the governing law, (ii) USD as the Termination Currency; and (iii)
that Party A and Party B will make the representations in Section (a) "Payer
Representations" of Part 2 "Tax Representations" of the Schedule to the ISDA
Form.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
B-3-1
customary for payments in the required currency. If on any date amounts would
otherwise be payable in the same currency by each party to the other, then, on
such date, each party's obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would
otherwise have been payable by the other party, replaced by an obligation upon
the party by whom the larger aggregate amount would have been payable to pay to
the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
This Confirmation will be governed by and construed in accordance with the laws
of the State of New York, without reference to choice of law doctrine other than
New York General Obligations Law Section 5-1401. Each party irrevocably agrees
that the courts of the State of New York located in the Borough of Manhattan and
the United States District Court for the Southern District of New York shall
have jurisdiction to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Confirmation and for such purposes hereby irrevocably submits to the
jurisdiction of such courts. Each party waives any objection which it may have
now or in the future to the laying of venue of any suit, action or proceeding in
the above courts and agrees not to claim that either court is an inconvenient
forum. Additionally to the fullest extent permitted by applicable law, each
party waives its respective right to jury trial with respect to any suit, action
or proceeding arising under, or in connection with, this Confirmation.
In this Confirmation "Party A" means DB and "Party B" means Long Beach Mortgage
Company.
2 The particular Transaction to which this Confirmation relates is a Rate Cap,
the terms of which are as follows:
Notional Amount: With respect to any Calculation Period, the lesser of:
(1)As detailed in Schedule A attached hereto for each
Calculation Period, and
(ii)the aggregate outstanding
Certificate Principal Balances
of the Class X-0, X-0, X-0, X-0, X-0,
X-0, M-7 and B Certificates
immediately prior to the last day of
such Calculation Period.
Cap Rate: As detailed in Schedule A attached hereto for each
Calculation Period.
Trade Date: 19 April 2004
Effective Date: 4 May 2004
B-3-2
Termination Date: 25 February 2008.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Amount: USD 490,000, paid by Party B to Party A on the Fixed
(Premium) Rate Payer Payment Date.
Fixed Rate Payer Payment Date: 4 May 2004
Floating Amounts:
Floating Rate Payer: Party A
Floating Rate Payer Period The 25th of each month, commencing 25 June 2004 through
End Dates: and including the Termination Date.
Floating Rate Payer Payment Dates: Two Business Days prior to each Floating Rate Payer
Period End Date
Floating Rate for initial Calculation Period: To be determined
Floating Rate Option: USD-LIBOR-BBA, provided, however, that if the
Floating Rate Option for any
Calculation Period is greater than
9.25% then the Floating Rate
Option shall be deemed to be 9.25%
for such Calculation Period.
Floating Rate Payer Payment Amount Notional Amount times the Floating Rate Day Count
Fraction times (Floating Rate Option minus Cap Rate);
provided, however, that no payment shall be made by
Party A and the Floating Rate Payer Payment Amount
shall be zero if the Floating Rate Option is less than
or equal to the Cap Rate.
Designated Maturity: 1 month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Floating Rate Payer Calculation
Period.
B-3-3
Rate Cut-off Dates: Inapplicable
Method of Averaging: Inapplicable
Compounding: Inapplicable
Compounding Dates: Inapplicable
Business Days for payment: New York
Calculation Agent: Party A
3 Credit Support Documents:
Party A Credit Support Documents: Inapplicable
Party B Credit Support Documents: Inapplicable
4 Account Details:
Payment to Party A: Account With: Deutsche Bank AG, New York
SWIFT CODE: XXXXXX00
ABA#: 026 003 780
FAVOR OF: Deutsche Bank AG, New York
Account Number: 100440170004
Payments to Party B: Deutsche Bank National Trust Company
ABA# 000000000
LA Asset Backed Account
Acct.# 01419663
Ref: LB0402
Cap payment ref # N299281N, N299287N
5 Offices:
The Office of Party A for the Transaction is New York, NY.
The Office of Party B for the Transaction is Santa Ana, CA.
6 For the purpose of Sections 4(a)(i) and (ii) of the ISDA Form, each party
agrees to deliver the following documents, as applicable:
(a)Tax forms, documents or certificates to be delivered are:
(i) As soon as possible or upon demand, any document required or reasonably
requested to allow the other party to make payments under this Transaction
without any deduction or withholding for or on account of any Tax, or with such
deduction or withholding at a reduced rate.
B-3-4
(b) Other documents to be delivered are:
(i) Upon execution and delivery of this Confirmation, copies of specimen
signatures of persons authorized to execute this Confirmation. This document
will be covered by the 3(d) representation of the ISDA Form.
(ii) As soon as possible upon request, such other documents as the other party
may reasonably request in connection with the Transaction to which this
Confirmation relates. These documents will be covered by the 3(d) representation
of the ISDA Form.
(iii) With respect to Party A only, and as soon as practicable after request,
annual audited financial statements prepared in accordance with generally
accepted accounting principles. These documents will be covered by the 3(d)
representation of the ISDA Form.
7 Addresses for Notices:
For the purpose of Section 12(a) of the ISDA Form:
Address for notices or communications to Party A:
Attention: Derivative Documentation
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
Email: Xxxxxxxxxx.Xxxxxxxxxxxxx@xx.xxx
Deutsche Bank AG, London Branch
00 Xxxxxxxxxxx, 0xx Xxxxx
XX0X 0XX, Xxxxxx, Xxxxxx Xxxxxxx
Address for notices or communications to Party B:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: LB 0402 Trust Administration
Tel: 000-000-000-0000
Fax: 000-000-000-0000
8 Additional Provisions
Notwithstanding the terms of Sections 5 and 6 of the ISDA Form, if Party B has
satisfied its payment obligations under Section 2(a)(i) of the ISDA Form, then
unless Party A is required pursuant to appropriate proceedings to return to
Party B or otherwise returns to Party B upon demand of Party B any portion of
such payment, (a) the occurrence of an event described in Section 5(a) of the
ISDA Form with respect to Party B shall not constitute an Event of Default or
Potential Event of Default with respect to Party B as the Defaulting Party and
(b) Party A shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the ISDA Form only as a result of a Termination Event set forth
B-3-5
in either Section 5(b)(i) or Section 5(b)(ii) of the ISDA Form with respect to
Party A as the Affected Party or Section 5(b)(iii) of the ISDA Form with respect
to Party A as the Burdened Party. For purposes of the Transaction to which this
Confirmation relates, Party B's only obligation under Section 2(a)(i) of the
ISDA Form is to pay the Fixed Amount on the Fixed Rate Payer Payment Date.
9 Transfer, Amendment and Assignment
No transfer, amendment, waiver, supplement, assignment or other modification of
this Transaction (other than the assignment of the Transaction to be entered
into on the Effective Date among Party A, Party B, Deutsche Bank National Trust
Company, not individually, but solely as Trustee (the "Trustee") under the
Pooling and Servicing Agreement dated 01 May 2004, among Long Beach Securities
Corp., as Depositor (the "Depositor"), Party B, as Master Servicer, and the
Trustee (the "Pooling Agreement") on behalf of Long Beach Mortgage Loan Trust
2004-2 (the "Trust") and the Depositor) shall be permitted by either party
unless each of Xxxxx'x Investors Service, Inc. ("Moody's"), Fitch Inc. ("Fitch")
and Standard & Poors Ratings Group, a division of McGraw Hill Companies, Inc
("S&P") has been provided notice of such transfer, amendment or assignment and
confirms in writing (including by facsimile transmission) within five Business
Days after such notice is given that it will not qualify, downgrade, withdraw or
modify its then-current rating of: (i) the Long Beach Mortgage Loan Trust 2004-2
Asset-Backed Certificates, Series 2004-2 (the "Certificates") that were rated
when issued, and (ii) certain net interest margin securities (the "NIMS") if
issued, that may be issued by a separate trust or Cayman Islands company
pursuant to an indenture to be entered into in connection with the NIMS (the
"Indenture") and secured by certain of the Certificates without regard to the
insurance policies issued by the Note Insurer and the Backup Note Insurer (each,
if any, as defined in the Indenture). Furthermore, no such transfer, amendment,
waiver, supplement, assignment or other modification shall be permitted by
either party unless the Note Insurer and the Backup Note Insurer, if any, shall
have been provided notice of the same and the Note Insurer and the Backup Note
Insurer shall have consented thereto; provided that such consent to a transfer
or assignment is not unreasonably withheld. Any transfer, amendment, waiver,
assignment or other modification without the consent of the Note Insurer and the
Backup Note Insurer shall be null and void, provided, however, that the Note
Insurer, if any, shall not have any consent rights hereunder if an Insurer
Default (if any, as defined in the Indenture) has occurred and is continuing and
the Backup Note Insurer, if any, shall not have any consent rights hereunder if
a Backup Note Insurer Default (if any, as defined in the Indenture) has occurred
and is continuing.
10. Proceedings
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Party B, Deutsche Bank
National Trust Company, not individually, but solely as Trustee under the
Pooling Agreement on behalf of the Trust or the Depositor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy, dissolution or similar law,
for a period of one year and one day following the later of indefeasible payment
in full of the Certificates and NIMS (if any).
B-3-6
11 Set-off:
The provisions for Set-off set forth in Section 6(e) of the ISDA Form shall not
apply for purposes of this Transaction.
12 Rating Agency Downgrade:
Notwithstanding anything else to the contrary herein, in the event that the
short-term unsecured and unsubordinated debt rating of Party A is withdrawn or
reduced below "A-1" by S&P or its short-term unsecured and unsubordinated debt
rating is withdrawn or reduced below "P-1" by Xxxxx'x (and together with S&P,
the "Swap Rating Agencies", and such rating thresholds, "Approved Rating
Thresholds"), then within 30 days after such rating withdrawal or downgrade
(unless, within 30 days after such withdrawal or downgrade, each such Swap
Rating Agency has reconfirmed the rating of the Certificates that were rated
when issued and/or the NIMS (if any), without regard to the Insurance Policies,
if any, issued by the Note Insurer and/or the Backup Note Insurer which was in
effect immediately prior to such withdrawal or downgrade), Party A, at its own
expense, shall (i) obtain another entity to replace Party A as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty of, or a
contingent agreement of another person with the Approved Rating Thresholds, to
honor, Party A's obligations under this Agreement, (iii) post collateral which
will be sufficient to restore the immediately prior ratings of the Certificates
that were rated when issued and/or the NIMS (if any), without regard to the
Insurance Policies, if any, issued by the Note Insurer or the Backup Note
Insurer; or (iv) establish any other arrangement satisfactory to each of the
Note Insurer and the Backup Note Insurer (if any) and the applicable Swap Rating
Agency which will be sufficient to restore the immediately prior ratings of the
Certificates that were rated when issued and/or the NIMS (if any), without
regard to the Insurance Policies, if any, issued by the Note Insurer and/or the
Backup Note Insurer.
13 Additional Termination Events:
Additional Termination Events will apply. If a Rating Agency Downgrade has
occurred and Party A has not, within 30 days, complied with Section 12 above,
then an Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such an Additional
Termination Event. For the avoidance of doubt, this Additional Termination Event
will only occur upon the written designation of an Early Termination Date with
respect thereto by Party B.
14 Amendment to the ISDA Form:
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the ISDA Form is
hereby amended by deleting the word "third" in the third line thereof and
inserting the word "first" in place thereof. The "Breach of Agreement,"
"Misrepresentation," "Default Under Specified Transaction," "Cross Default" and
"Credit Event Upon Merger" provisions in Sections 5(a)(ii), 5(a)(iii), 5(a)(iv),
B-3-7
5(a)(v), 5(a)(vi) and 5(b)((iv), and clause (2) in the "Bankruptcy" provisions
in Section 5(a)(vii) of the ISDA Form shall not apply to either Party A or Party
B. The "Additional Termination Event" provision in Section 5(b)(v) of the ISDA
Form will apply to Part A as set forth in Section 13 hereof.
15 Additional Basic Representations:
In Section 3(a) of the ISDA Form the following representations which shall be
construed as Section 3(a)(vi) and (vii) shall be added:
(vi) Organization. It is, in the case of Party B, a corporation organized under
the laws of the State of Delaware. (vii)Eligible Contract Participant. It is an
"eligible contract participant" as defined in Section 1a (12) of the Commodity
Exchange Act (7 U.S.C. 1a), as amended.
Payer Representations. For the purpose of Section 3(e) of the ISDA Form, Party A
will make the following representation and Party B will not make the following
representation:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to
be made by it to the other party under this Agreement.
16. Relationship Between Parties:
Each party will be deemed to represent to the other party on the date on which
it enters into this Transaction or an amendment thereof that:
(i) Each Party is acting for its own account. Each Party has made its own
independent decisions to enter into this Transaction and as to whether this
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into this Transaction; it being understood that
information and explanations related to the terms and conditions of this
Transaction shall not be considered investment advice or a recommendation to
enter into this Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of this Transaction.
(ii) It is capable of evaluating and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks of this Transaction. It is also capable of assuming, and
assumes, the financial and other risks of this Transaction.
(iii) The other party is not acting as a fiduciary or an advisor for it in
respect of this Transaction.
(iv) It is aware that each other party to this Agreement and its Affiliates may
from time to time (A) take positions in instruments that are identical or
economically related to this Transaction or (B) have an investment banking or
other commercial relationship with the issuer of an instrument underlying this
Transaction.
B-3-8
17. Definitions:
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Pooling Agreement. In the case of any inconsistency between this
Confirmation and such terms, this Confirmation will prevail.
18 Third Party Beneficiaries:
Each of the Note Insurer and the Backup Note Insurer, if any, is a third party
beneficiary of this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
19 Automatic Early Termination:
The Automatic Early Termination provisions of Section 6(a) of the ISDA Form will
not apply to Party A or Party B; provided, however, that for Party A (i) where
the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or,
to the extent analogous thereto, (8) of the ISDA Form, is governed by a system
of law which does not permit termination to take place after the occurrence of
the relevant Event of Default, then the Automatic Early Termination provision of
Section 6(a) of the ISDA Form will apply to the Defaulting Party for purpose of
such Event of Default, and (ii) to the extent that Section 6(a) of the ISDA Form
is applicable, the second sentence of Section 6(a) of the ISDA Form shall only
apply with respect to an Event of Default specified in Section 5(a)(vii)(4) of
the ISDA Form or, to the extent analogous thereto, Section 5(a)(vii)(8) of the
ISDA Form, if the relevant petition is presented to a court or other authority
in the jurisdiction where the Defaulting Party is incorporated.
B-3-9
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile
transmission at 00-00-0000-0000 (Derivative Documentation). If you have any
questions regarding payments or resets, please contact Derivative Documentation
at 00-00-0000-0000.
We are happy to have completed this transaction with you.
Yours sincerely,
DEUTSCHE BANK AG, NEW YORK BRANCH
By: ________________________
Name:
Title
Accepted and confirmed as of the date first above written:
Long Beach Mortgage Company
By: ________________________
Name Xxxxxxx X Xxxxxxxx
Title First Vice President
B-3-10
For use with Reference Number N299281N, N299287N
Schedule A
Subordinate
From and
Calculation Period Including To but Excluding Notional Amount ($) Cap Rate (%)
------------------ ------------ ---------------- ------------------ --------------
1 5/25/2004 6/25/2004 $247,100,000 6.03%
2 6/25/2004 7/25/2004 $247,100,000 6.23%
3 7/25/2004 8/25/2004 $247,100,000 6.03%
4 8/25/2004 9/25/2004 $247,100,000 6.03%
5 9/25/2004 10/25/2004 $247,100,000 6.24%
6 10/25/2004 11/25/2004 $247,100,000 6.04%
7 11/25/2004 12/25/2004 $247,100,000 6.24%
8 12/25/2004 1/25/2004 $247,100,000 6.04%
9 1/25/2004 2/25/2005 $247,100,000 6.04%
10 2/25/2005 3/25/2005 $247,100,000 6.69%
11 3/25/2005 4/25/2005 $247,100,000 6.05%
12 4/25/2005 5/25/2005 $247,100,000 6.25%
13 5/25/2005 6/25/2005 $247,100,000 6.05%
14 6/25/2005 7/25/2005 $247,100,000 6.25%
15 7/25/2005 8/25/2005 $247,100,000 6.05%
16 8/25/2005 9/25/2005 $247,100,000 6.05%
17 9/25/2005 10/25/2005 $247,100,000 6.25%
18 10/25/2005 11/25/2005 $247,100,000 6.05%
19 11/25/2005 12/25/2005 $247,100,000 6.26%
20 12/25/2005 1/25/2006 $247,100,000 6.05%
21 1/25/2006 2/25/2006 $247,100,000 6.06%
22 2/25/2006 3/25/2006 $247,100,000 7.48%
23 3/25/2006 4/25/2006 $247,100,000 6.78%
24 4/25/2006 5/25/2006 $247,100,000 7.01%
25 5/25/2006 6/25/2006 $247,100,000 6.79%
26 6/25/2006 7/25/2006 $247,100,000 7.01%
27 7/25/2006 8/25/2006 $247,100,000 6.79%
28 8/25/2006 9/25/2006 $247,100,000 7.47%
29 9/25/2006 10/25/2006 $247,100,000 7.75%
30 10/25/2006 11/25/2006 $247,100,000 7.51%
31 11/25/2006 12/25/2006 $247,100,000 7.76%
32 12/25/2006 1/25/2007 $247,100,000 7.50%
33 1/25/2007 2/25/2007 $247,100,000 7.51%
34 2/25/2007 3/25/2007 $247,100,000 9.09%
35 3/25/2007 4/25/2007 $247,100,000 8.27%
36 4/25/2007 5/25/2007 $247,100,000 8.55%
37 5/25/2007 6/25/2007 $235,301,586 8.27%
38 6/25/2007 7/25/2007 $220,566,201 8.55%
39 7/25/2007 8/25/2007 $206,206,632 8.27%
40 8/25/2007 9/25/2007 $192,213,578 8.95%
41 9/25/2007 10/25/2007 $178,618,883 9.28%
42 10/25/2007 11/25/2007 $168,009,286 8.99%
43 11/25/2007 12/25/2007 $163,147,191 9.29%
44 12/25/2007 1/25/2008 $158,970,530 8.99%
45 1/25/2008 2/25/2008 $154,900,127 8.99%
X-0-00
XXXXXXX X-0
FORM OF CAP ASSIGNMENT AGREEMENT
DATE: 04 May 2004
TO: Long Beach Mortgage Company
ATTENTION: Xxxxxxx X Xxxxxxxx
TELEPHONE: 000-000-000-0000
FACSIMILE: 000-000-000-0000
TO: Long Beach Securities Corp.
ATTENTION: Xxxxxxx X Xxxxxxxx
TELEPHONE: 000-000-000-0000
FACSIMILE: 000-000-000-0000
TO: Deutsche Bank National Trust Company, not individually but solely as
Trustee (the "Trustee") under the Pooling and Servicing Agreement dated 01
May 2004 among Long Beach Securities Corp., as Depositor, Long Beach
Mortgage Company, as Master Servicer, and the Trustee on behalf of Long
Beach Mortgage Loan Trust 2004-2
ATTENTION: Xxxxxxx Xxxxxxx
TELEPHONE: 000-000-000-0000
FACSIMILE: 000-000-000-0000
FROM: Deutsche Bank AG, New York branch
ATTENTION: Derivative Documentation
TELEPHONE: 00-00-0000-0000
FACSIMILE: 00-00-0000-0000
SUBJECT: Fixed Income Cap Assignment Agreement
REFERENCE NUMBER(S): (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N)
The purpose of this letter is to set forth the terms and conditions of the
assignment and assumption amongst Long Beach Mortgage Company ("LBMC"), Long
Beach Securities Corp. ("LBSC"), Deutsche Bank National Trust Company, not
individually, but solely as Trustee (the "Trustee") under the Pooling and
Servicing Agreement dated as of 01 May 2004, among LBSC, as Depositor, LBMC, as
Master Servicer and the Trustee (the "Pooling Agreement") on behalf of Long
Beach Mortgage Loan Trust 2004-2 and Deutsche Bank AG, New York branch ("DB")
(the "Assignment Agreement") agreed to on 04 May 2004.
B-4-1
Reference Number: (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N) - Assignment Agreement
Long Beach Mortgage Company
04 May 2004
Page 2 of 6
LBMC and DB are parties to a Transaction (the "Transaction"), as evidenced by
(i) a letter agreement and confirmation dated 19 April 2004 attached hereto as
Exhibit A ("Confirmation #1"), (ii) a letter agreement and confirmation dated 19
April 2004 attached hereto as Exhibit B ("Confirmation #2"), and (iii) a letter
agreement and confirmation dated 19 April 2004 attached as Exhibit C
("Confirmation #3," and together with Confirmation #1 and Confirmation #2, the
"Confirmations").
The terms of the assignment of the Transaction are as follows:
1. The following assignments and assumptions of the Transaction shall occur on
the Effective Assignment Date sequentially as follows:
A. LBMC hereby assigns to LBSC, and LBSC hereby assumes from LBMC, all of the
rights, interests and obligations of LBMC in and under the Transaction, and the
Transaction shall be governed by this Assignment Agreement and the
Confirmations. Each of Confirmation #1, Confirmation #2 and Confirmation #3,
together with this Assignment Agreement shall be deemed a transaction
confirmation between LBSC and DB; such Assignment Agreement to be effective on
and as of the Effective Assignment Date.
B. LBSC hereby assigns to Deutsche Bank National Trust Company, not
individually, but solely as Trustee under the Pooling Agreement on behalf of
Long Beach Mortgage Loan Trust 2004-2 and Deutsche Bank National Trust Company,
not individually, but solely as Trustee under the Pooling Agreement on behalf of
the Long Beach Mortgage Loan Trust 2004-2 hereby assumes from LBSC, all of the
rights, interests and obligations of LBSC in and under the Transaction; and the
Transaction shall be governed by this Assignment Agreement. Each of Confirmation
#1, Confirmation #2 and Confirmation #3, together with this Assignment Agreement
shall be deemed a transaction confirmation between Deutsche Bank National Trust
Company, not individually, but solely as Trustee under the Pooling Agreement on
behalf of Long Beach Mortgage Loan Trust 2004-2 and DB; such Assignment
Agreement to be effective on and as of the Effective Assignment Date.
2. The "Effective Assignment Date" shall be 04 May 2004.
3. On the Effective Assignment Date, solely as among DB, LBMC and LBSC, each of
LBMC and LBSC hereby releases DB, and DB hereby releases each of LBMC and LBSC
and each of LBMC and LBSC hereby releases each other, from all rights, interests
and obligations relating to the Transaction and none of the parties referenced
in this paragraph shall have any further obligations to make payments or any
other obligations to each other relating to the Transaction.
B-4-2
Reference Number: (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N) - Assignment Agreement
Long Beach Mortgage Company
04 May 2004
Page 3 of 6
4. DB expressly understands and agrees that (i) all of the rights, interest and
obligations under the Transaction have been assigned to Deutsche Bank National
Trust Company, not individually, but solely as Trustee under the Pooling
Agreement on behalf of Long Beach Mortgage Loan Trust 2004-2 and (ii) insofar as
this Assignment Agreement is executed by the Trustee (a) this Assignment
Agreement is executed and delivered by Deutsche Bank National Trust Company, not
in its individual capacity but solely as Trustee under the Pooling Agreement on
behalf of Long Beach Mortgage Loan Trust 2004-2 referred to in this Assignment
Agreement in the exercise of the powers and authority conferred and vested in it
thereunder, (b) under no circumstances shall Deutsche Bank National Trust
Company in its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken under
this Assignment Agreement, (c) the representations, undertakings and agreements
herein made by Trustee are made and intended not as personal representations,
undertakings and agreements by Deutsche Bank National Trust Company but are made
and intended for the purpose of binding Long Beach Mortgage Loan Trust 2004-2;
and (d) nothing herein contained shall be construed as creating any liability on
Deutsche Bank National Trust Company, individually or personally, to perform any
covenant either expressed or implied, all such liability, if any, being
expressly waived by the parties who are signatories hereto and by any person
claiming by, through or under such parties.
5. DB makes to Deutsche Bank National Trust Company, not individually, but
solely as Trustee under the Pooling Agreement on behalf of Long Beach Mortgage
Loan Trust 2004-2 and Deutsche Bank National Trust Company, not individually,
but solely as Trustee under the Pooling Agreement on behalf of Long Beach
Mortgage Loan Trust 2004-2 makes to DB those representations set forth in
Section 3(a) of the ISDA Form (as defined in the Confirmations) referenced in
the Confirmations with references in such Section to "this Agreement" being
deemed references to this Assignment Agreement.
6. Deutsche Bank National Trust Company, not individually, but solely as Trustee
under the Pooling Agreement on behalf of Long Beach Mortgage Loan Trust 2004-2
and DB hereby acknowledge that no further redocumentation of the Transaction is
necessary upon the execution by all parties of this Assignment Agreement and,
upon the Effective Assignment Date, all references to Party A in each
Confirmation shall continue to be references to DB and all references to Party B
in each Confirmation shall be deemed to be references to Deutsche Bank National
Trust Company, not individually, but solely as Trustee under the Pooling
Agreement on behalf of Long Beach Mortgage Loan Trust 2004-2.
B-4-3
Reference Number: (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N) - Assignment Agreement
Long Beach Mortgage Company
04 May 2004
Page 4 of 6
This Assignment Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument. In providing this Assignment Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
It is expressly understood and agreed by the parties hereto that insofar as this
Assignment Agreement is executed by the Trustee: (i) this Assignment Agreement
is executed and delivered by Deutsche Bank National Trust Company, not in its
individual capacity but solely as Trustee under the Pooling Agreement on behalf
of Long Beach Mortgage Loan Trust 2004-2 referred to in this Assignment
Agreement in the exercise of the powers and authority conferred and vested in it
thereunder, (ii) under no circumstances shall Deutsche Bank National Trust
Company in its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken under
this Assignment Agreement or in any of the Confirmations, (c) the
representations, undertakings and agreements herein made by Trustee are made and
intended not as personal representations, undertakings and agreements by
Deutsche Bank National Trust Company but are made and intended for the purpose
of binding Long Beach Mortgage Loan Trust 2004-2; and (d) nothing herein
contained shall be construed as creating any liability on Deutsche Bank National
Trust Company, individually or personally, to perform any covenant either
expressed or implied, all such liability, if any, being expressly waived by the
parties who are signatories hereto and by any person claiming by, through or
under such parties.
LBMC, LBSC, Deutsche Bank National Trust Company, not individually, but solely
as Trustee under the Pooling Agreement on behalf of Long Beach Mortgage Loan
Trust 2004-2 and DB hereby agree to check this Assignment Agreement and to
confirm that the foregoing correctly sets forth the terms of the agreement among
LBMC, LBSC, Deutsche Bank National Trust Company, not individually, but solely
as Trustee under the Pooling Agreement on behalf of Long Beach Mortgage Loan
Trust 2004-2 and DB with respect to the Transaction to which this Assignment
Agreement relates by signing in the spaces below and returning to DB a signed
facsimile of this Assignment Agreement. For inquiries, please contact Derivative
Documentation by telephone at 00-00-0000-0000.
Very truly yours,
DEUTSCHE BANK AG, NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
B-4-4
Reference Number: (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N) - Assignment Agreement
Long Beach Mortgage Company
04 May 2004
Page 5 of 6
On behalf of LBMC, I hereby agree to, accept and confirm the terms of the
foregoing as of the date first above written.
LONG BEACH MORTGAGE COMPANY
By: -------------------------------------
As authorized officer for Long Beach Mortgage Company
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
On behalf of LBSC, I hereby agree to, accept and confirm the terms of the
foregoing as of the date first above written.
LONG BEACH SECURITIES CORP.
By:
----------------------------------
As authorized officer for Long Beach Securities Corp.
Name: Xxxxxxx X Xxxxxxxx
Title: Vice President
B-4-5
Reference Number: (N299288N, N299289N); (N299270N, N299292N); (N299281N,
N299287N) - Assignment Agreement
Long Beach Mortgage Company
04 May 2004
Page 6 of 6
On behalf of Deutsche Bank National Trust Company, not individually but solely
as Trustee (the "Trustee") under the Pooling and Servicing Agreement dated 01
May 2004 among Long Beach Securities Corp., as Depositor, Long Beach Mortgage
Company, as Master Servicer, and the Trustee on behalf of Long Beach Mortgage
Loan Trust 2004-2, I hereby agree to, accept and confirm the terms of the
foregoing as of the date first above written.
Deutsche Bank National Trust Company, not individually but solely as Trustee
(the "Trustee") under the Pooling and Servicing Agreement dated 01 MAY 2004
among Long Beach Securities Corp., as Depositor, Long Beach Mortgage Company, as
Master Servicer, and the Trustee on behalf of Long Beach Mortgage Loan Trust
2004-2
By:
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By:
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Associate
B-4-6
Exhibit A
B-4
Exhibit B
B-4
Exhibit C
B-4
EXHIBIT C
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Mortgage Loan Purchase Agreement (the "Agreement"), dated April 28,
2004, between Long Beach Securities Corp., a Delaware corporation (the
"Purchaser") and Long Beach Mortgage Company, a Delaware corporation (the
"Seller").
Preliminary Statement
The Seller intends to sell certain mortgage loans and the yield maintenance
agreements to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser intends to deposit the mortgage loans and the
yield maintenance agreements into a mortgage pool constituting the trust fund.
The trust fund will issue fixed rate and adjustable rate asset backed
certificates designated as Long Beach Mortgage Loan Trust 2004-2 Asset-Backed
Certificates, Series 2004-2 (the "Certificates"). The Certificates will consist
of seventeen classes of certificates. The Certificates will be issued pursuant
to a Pooling and Servicing Agreement, dated as of May 1, 2004 (the "Pooling and
Servicing Agreement"), among the Purchaser, as depositor, Deutsche Bank National
Trust Company, as trustee (the "Trustee") and the Seller, as master servicer (in
such capacity, the "Master Servicer"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.
The parties hereto agree as follows:
SECTION 1. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase, on or before
May 4, 2004 (the "Closing Date"), those certain fixed-rate and adjustable-rate
residential mortgage loans (the "Mortgage Loans") and the yield maintenance
agreements, together with all related guarantees, as set forth on Schedule A
attached hereto (the "Yield Maintenance Agreements").
SECTION 2. Mortgage Loan Schedule.
The Purchaser and the Seller have agreed upon which of the mortgage loans owned
by the Seller are to be purchased by the Purchaser pursuant to this Agreement on
the Closing Date and the Seller shall prepare or cause to be prepared on or
prior to the Closing Date a final schedule (the "Closing Schedule") that shall
describe such Mortgage Loans and set forth all of the Mortgage Loans to be
purchased under this Agreement. The Closing Schedule shall conform to the
requirements set forth in this Agreement and to the definition of "Mortgage Loan
Schedule" under the Pooling and Servicing Agreement. The Closing Schedule shall
be the Mortgage Loan Schedule under the Pooling and Servicing Agreement.
SECTION 3. Consideration.
In consideration for the Mortgage Loans and the Yield Maintenance Agreements to
be purchased hereunder, the Purchaser shall on the Closing Date, as described in
Section 8 hereof, (i) pay to or upon the order of the Seller in immediately
available funds an amount (the "Purchase Price") equal to the net cash sale
proceeds of the Class A-1 Certificates, the Class A-2 Certificates, the Class
A-3 Certificates, the Class A-4 Certificates, the Mezzanine Certificates and the
Class B Certificates and (ii) deliver to the Seller or Long Beach Asset Holdings
Corp., upon the order of the Seller, the Class C Certificates, the Class P
Certificates, the Class R Certificates, the Class R-CX Certificates and the
Class R-PX Certificates (the "Long Beach Certificates").
The Purchaser or any assignee, transferee or designee of the Purchaser shall be
entitled to (i) all scheduled payments of principal due after May 1, 2004 (the
"Cut-off Date"), (ii) all unscheduled collections in respect of the Mortgage
Loans received after April 1, 2004 (other than the portion of such collections
due on or prior to the Cut-off Date), (iii) all other payments of principal due
and collected after the Cut-off Date, and (iv) all payments of interest on the
Mortgage Loans due after the Cut-off Date. All scheduled payments of principal
and interest due on or before the Cut-off Date and collected after the Cut-off
Date shall belong to the Seller.
Pursuant to the Pooling and Servicing Agreement, the Purchaser will transfer,
assign, set over and otherwise convey to the Trustee without recourse for the
benefit of the Certificateholders, all the right, title and interest of the
Purchaser in and to the Mortgage Loans and the Yield Maintenance Agreements,
together with its rights under this Agreement (other than Section 17 hereof).
SECTION 4. Transfer of the Mortgage Loans and the Yield Maintenance
Agreements.
(a) Possession of Mortgage Files. The Seller does hereby sell, transfer, assign,
set over and convey to the Purchaser, without recourse, but subject to the terms
of this Agreement, all of its right, title and interest in, to and under the
Mortgage Loans and the Yield Maintenance Agreements. The contents of each
Mortgage File related to a Mortgage Loan not delivered to the Purchaser or to
any assignee, transferee or designee of the Purchaser on or prior to the Closing
Date are and shall be held in trust by the Seller for the benefit of the
Purchaser or any assignee, transferee or designee of the Purchaser and promptly
transferred to the Trustee. Upon the sale of the Mortgage Loans, the ownership
C-1
of each related Mortgage Note, the related Mortgage and the other contents of
the related Mortgage File shall be vested in the Purchaser and the ownership of
all records and documents with respect to the related Mortgage Loan prepared by
or that come into the possession of the Seller on or after the Closing Date
shall immediately vest in the Purchaser and shall be delivered promptly to the
Purchaser or as otherwise directed by the Purchaser.
(b) Delivery of Mortgage Loan Documents. The Seller will, on or prior to the
Closing Date deliver or cause to be delivered to the Purchaser, the Trustee or
their designee each of the following documents for each Mortgage Loan:
(i) the original Mortgage Note, endorsed in blank or in the following form: "Pay
to the order of Deutsche Bank National Trust Company, as Trustee, under the
applicable agreement, without recourse," with all prior and intervening
endorsements, showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee or (in the case of not more than 1.00% of the
Mortgage Loans, by aggregate principal balance as of the Cut-off Date) a copy of
such original Mortgage Note with an accompanying Lost Note Affidavit executed by
the Seller;
(ii) the original Mortgage with evidence of recording thereon, and a copy,
certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(iii) an original Assignment in blank;
(iv) the original recorded Assignment or Assignments showing a complete chain of
assignment from the originator to the Person assigning the Mortgage to the
Trustee or in blank;
(v) the original or copies of each assumption, modification, written assurance
or substitution agreement, if any; and
(vi) the original lender's title insurance policy, (or a copy of the above, in
the case of any Washington Mutual Mortgage Loans) together with all endorsements
or riders issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien or second lien on the Mortgaged
Property represented therein as a fee interest vested in the Mortgagor, or in
the event such title policy is unavailable, a written commitment or uniform
binder or preliminary report of the title issued by the title insurance or
escrow company.
The Seller shall promptly (and in no event later than thirty (30) Business Days,
subject to extension upon a mutual agreement between the Seller and the
Purchaser) following the later of the Closing Date and the date of receipt by
the Seller of the recording information for a Mortgage submit or cause to be
submitted for recording, at no expense to the Purchaser, in the appropriate
public office for real property records, each Assignment referred to in (iii)
and (iv) above and shall execute each original Assignment referred to in clause
(iii) above in the following form: "Deutsche Bank National Trust Company, as
Trustee under the applicable agreement, without recourse." In the event that any
such Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall promptly prepare or cause to be prepared a substitute Assignment or
cure or cause to be cured such defect, as the case may be, and thereafter cause
each such Assignment to be duly recorded. Notwithstanding the foregoing, the
Assignments referred to in (iii) and (iv) above shall not be required to be
completed and submitted for recording with respect to any Mortgage Loan if each
Rating Agency does not require recordation for such Rating Agency to assign the
initial ratings to the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Mezzanine Certificates,
the Class B Certificates and the Other NIM Notes and initial shadow rating to
the Insured NIM Notes, without giving effect to any insurance policy issued by
the NIMS Insurer; provided, however, each Assignment referred to in (iii) and
(iv) above shall be submitted for recording by the Seller, in the manner
described above, at no expense to the Purchaser, Trust Fund or the Trustee, upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Default, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer
as described in Section 7.02 of the Pooling and Servicing Agreement and (v) if
the Seller is not the Master Servicer and with respect to any one Assignment,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.
If any document referred to in Section 4(b)(ii), Section 4(b)(iii), Section
4(b)(iv), or Section 4(b)(v) above (collectively, the "Recording Documents") has
as of the Closing Date been submitted for recording but either (x) has not been
returned from the applicable public recording office or (y) has been lost or
such public recording office has retained the original of such document, the
obligations of the Seller to deliver such Recording Documents shall be deemed to
be satisfied upon (1) delivery to the Purchaser, the Trustee or their designee
of a copy of each such Recording Document certified by the Seller in the case of
(x) above or the applicable public recording office in the case of (y) above to
be a true and complete copy of the original that was submitted for recording and
(2) if such copy is certified by the Seller, delivery to the Purchaser, the
Trustee or their designee upon receipt thereof, and in any event no later than
one year after the Closing Date (except as provided below), of either the
C-2
original or a copy of such Recording Document certified by the applicable public
recording office to be a true and complete copy of the original. In instances
where, due to a delay on the part of the applicable recording office where any
such Recording Documents have been delivered for recordation, the Recording
Documents cannot be delivered to the Purchaser, the Trustee or their designee
within one year after the Closing Date, the Seller shall deliver to the
Purchaser, the Trustee or their designee within such time period an Officer's
Certificate stating the date by which the Seller expects to receive such
Recording Documents from the applicable recording office. If the Recording
Documents have still not been received by the Seller and delivered to the
Purchaser, the Trustee or their designee by such date, the Seller shall deliver
to the Purchaser, the Trustee or their designee by such date an additional
Officer's Certificate stating a revised date by which Seller expects to receive
the applicable Recording Documents. This procedure shall be repeated until the
Recording Documents have been received by the Seller and delivered to the
Purchaser, the Trustee or their designee. If the original or copy of the
lender's title insurance policy was not delivered pursuant to Section 4(b)(vi)
above, the Seller shall deliver or cause to be delivered to the Purchaser, the
Trustee or their designee promptly after receipt thereof, and in any event
within 120 days after the Closing Date such title insurance policy. The Seller
shall deliver or cause to be delivered to the Purchaser, the Trustee or their
designee promptly upon receipt thereof any other original documents constituting
a part of a Mortgage File received with respect to any Mortgage Loan, including,
but not limited to, any original documents evidencing an assumption or
modification of any Mortgage Loan.
Each original document relating to a Mortgage Loan which is not delivered to the
Purchaser, the Trustee or their designee, if held by the Seller, shall be so
held for the benefit of the Purchaser, the Trustee or their designees. In the
event that any such original document is required pursuant to the terms of this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Purchaser, the Trustee or their designee. Any such original
document that is not required pursuant to the terms of this Section to be a part
of a Mortgage File shall be held by the Seller in its capacity as Master
Servicer.
(c) Acceptance of Mortgage Loans. The documents delivered pursuant to Section
4(b) hereof shall be reviewed by the Purchaser or any assignee, transferee or
designee of the Purchaser at any time before, on and after the Closing Date (and
with respect to each document permitted to be delivered after the Closing Date
within seven days of its delivery) to ascertain that all required documents have
been executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule.
(d) Transfer of Interest in Agreements. The Purchaser has the right to assign
its interest under this Agreement (other than Section 17 hereof), in whole or in
part, to the Trustee, as may be required to effect the purposes of the Pooling
and Servicing Agreement, without the consent of the Seller, and the Trustee
shall succeed to the rights and obligations hereunder of the Purchaser. Any
expense reasonably incurred by or on behalf of the Purchaser, the Trustee, or
the NIMS Insurer, if any, in connection with enforcing any obligations of the
Seller under this Agreement will be promptly reimbursed by the Seller.
(e) Examination of Mortgage Files. Prior to the Closing Date the Seller shall
either (i) deliver in escrow to the Purchaser or to any assignee, transferee or
designee of the Purchaser, for examination, the Mortgage File pertaining to each
Mortgage Loan, or (ii) make such Mortgage Files available to the Purchaser or to
any assignee, transferee or designee of the Purchaser for examination. Such
examination may be made by the Purchaser or the Trustee, and their respective
designees, upon reasonable notice to the Seller during normal business hours at
any time before or after the Closing Date. If any such person makes such
examination prior to the Closing Date and identifies any Mortgage Loans with
respect to which the Seller's representations and warranties contained in this
Agreement are not correct, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule. The Purchaser may, at its option and without notice to
the Seller, purchase all or part of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or any person has
conducted or has failed to conduct any partial or complete examination of the
related Mortgage Files shall not affect the rights of the Purchaser or any
assignee, transferee or designee of the Purchaser to demand repurchase or other
relief as provided herein or under the Pooling and Servicing Agreement.
SECTION 5. Representations, Warranties and Covenants of the Seller.
The Seller hereby represents and warrants and covenants to the Purchaser, as of
the date hereof and as of the Closing Date:
(i) The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to be
conducted by the Seller in any state in which a Mortgaged Property is located or
is otherwise not required under applicable law to effect such qualification and,
in any event, is in compliance with the doing business laws of any such state,
to the extent necessary to ensure its ability to enforce each Mortgage Loan and
to service the Mortgage Loans in accordance with the terms of the Pooling and
Servicing Agreement;
(ii) The Seller had the full corporate power and authority to originate, hold
and sell each Mortgage Loan and has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Purchaser,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (a) bankruptcy, insolvency, moratorium,
receivership, conservatorship, arrangement, moratorium and other similar laws
relating to creditors' rights generally and (b) the general principles of
equity, whether such enforcement is sought in equity or at law;
(iii) The execution and delivery of this Agreement by the Seller, the servicing
of the Mortgage Loans by the Seller under the Pooling and Servicing Agreement,
the consummation of any other of the transactions herein contemplated, and the
fulfillment of or compliance with the terms hereof are in the ordinary course of
business of the Seller and does not (A) result in a breach of any term or
provision of the charter or by-laws of the Seller, (B) conflict with, result in
a breach, violation or acceleration of, or result in a default under, the terms
of any other material agreement, instrument or indenture to which the Seller is
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a party or by which it may be bound, or any statute, order or regulation
applicable to the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller or any of its property or
(C) result in the creation or imposition of any lien, charge or encumbrance
which would have a material adverse effect upon the Mortgage Loans or any
documents or instruments evidencing or securing the Mortgage Loans; and the
Seller is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and adversely
affects or, to the Seller's knowledge, would in the future result in the
creation or imposition of any lien, charge or encumbrance which would have a
material adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans or materially and adversely affect (x)
the ability of the Seller to perform its obligations under this Agreement or the
Pooling and Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Seller taken as a whole;
(iv) No consent, approval, authorization, or order of, any court or governmental
agency or body is required for the execution, delivery and performance by the
Seller of, or compliance by the Seller with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Seller has obtained the same;
(v) The Seller is an approved seller/servicer for Xxxxxx Xxx or Xxxxxxx Mac in
good standing and is a HUD approved mortgagee pursuant to Section 203 and
Section 211 of the National Housing Act;
(vi) No litigation or proceeding is pending or, to the best knowledge of the
Seller, threatened, against the Seller that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
Pooling and Servicing Agreement or the issuance of the Certificates or the
ability of the Seller to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms hereof and the terms of
the Pooling and Servicing Agreement or, that would result in a material adverse
change in the financial or operating conditions of the Seller;
(vii) No certificate of an officer, statement or other information furnished in
writing or report delivered by the Seller to the Purchaser, any Affiliate of the
Purchaser or the Trustee for use in connection with the purchase of the Mortgage
Loans and the transactions contemplated hereunder and under the Pooling and
Servicing Agreement contains any untrue statement of a material fact, or omits a
material fact necessary to make the information, certificate, statement or
report not misleading in any material respect;
(viii) The Seller has not dealt with any broker, investment banker, agent or
other person, except for the Purchaser or any of its affiliates, that may be
entitled to any commission or compensation in connection with the sale of the
Mortgage Loans;
(ix) Each Mortgage Note, each Mortgage, each Assignment and any other document
required to be delivered by or on behalf of the Seller under this Agreement or
the Pooling and Servicing Agreement to the Purchaser or any assignee, transferee
or designee of the Purchaser for each Mortgage Loan has been or will be, in
accordance with Section 4(b) hereof, delivered to the Purchaser or any such
assignee, transferee or designee. With respect to each Mortgage Loan, the Seller
is in possession of a complete Mortgage File in compliance with the Pooling and
Servicing Agreement, except for such documents that have been delivered (1) to
the Purchaser or any assignee, transferee or designee of the Purchaser or (2)
for recording to the appropriate public recording office and have not yet been
returned;
(x) The Seller (A) is a solvent entity and is paying its debts as they become
due, (B) immediately after giving effect to the transfer of the Mortgage Loans,
will be a solvent entity and will have sufficient resources to pay its debts as
they become due and (C) did not sell the Mortgage Loans to the Purchaser with
the intent to hinder, delay or defraud any of its creditors; and
(xi) The transfer of the Mortgage Loans to the Purchaser at the Closing Date
will be treated by the Seller for financial accounting and reporting purposes as
a sale of assets.
SECTION 6. Representations and Warranties of the Seller Relating to the
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, that as of the
Closing Date with respect to each Mortgage Loan:
(i) The information set forth on the Mortgage Loan Schedule with respect to each
Mortgage Loan is complete, true and correct in all material respects as of the
Cut-off Date, unless another date is set forth on the Mortgage Loan Schedule;
(ii) [reserved];
(iii) Each Mortgage is a valid and enforceable first or second lien on the
Mortgaged Property, including all improvements thereon, subject only to (a) the
lien of non-delinquent current real property taxes and assessments, (b)
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covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage, such
exceptions appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan and which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage, (c)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage and (d) in the case of a second lien, only to a first lien on
such Mortgaged Property;
(iv) Immediately prior to the assignment of the Mortgage Loans to the Purchaser,
the Seller had good title to, and was the sole legal and beneficial owner of,
each Mortgage Loan, free and clear of any pledge, lien, encumbrance or security
interest and has full right and authority, subject to no interest or
participation of, or agreement with, any other party to sell and assign the
same. The form of endorsement of each Mortgage Note satisfied the requirement,
if any, of endorsement in order to transfer all right, title and interest of the
party so endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note; and each Assignment to be delivered hereunder is in recordable form and is
sufficient to effect the assignment of and to transfer to the assignee
thereunder the benefits of the assignor, as mortgagee or assignee thereof, under
each Mortgage to which that Assignment relates;
(v) To the best of the Seller's knowledge, there is no delinquent tax or
assessment lien against any Mortgaged Property;
(vi) There is no valid offset, defense or counterclaim to any Mortgage Note
(including any obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note) or the Mortgage, nor will the operation of any
of the terms of the Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage Note or the Mortgage unenforceable, in whole or
in part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(vii) To the best of the Seller's knowledge, there are no mechanics' liens or
claims for work, labor or material affecting any Mortgaged Property which are or
may be a lien prior to, or equal with, the lien of the related Mortgage, except
those which are insured against by the title insurance policy referred to in
(xi) below;
(viii) To the best of the Seller's knowledge, each Mortgaged Property is free of
material damage and is at least in average repair;
(ix) Each Mortgage Loan at origination complied in all material respects with
applicable local, state and federal laws, including, without limitation,
predatory and abusive lending, usury, equal credit opportunity, real estate
settlement procedures, truth-in-lending and disclosure laws, and consummation of
the transactions contemplated hereby, including without limitation the receipt
of interest does not involve the violation of any such laws;
(x) Neither the Seller nor any prior holder of any Mortgage has modified the
Mortgage in any material respect, satisfied, canceled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in whole
or in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect thereto (except
that a Mortgage Loan may have been modified by a written instrument signed by
the Seller or a prior holder of the Mortgage Loan which has been recorded, if
necessary, to protect the interests of the Seller and the Purchaser and which
has been delivered to the Purchaser or any assignee, transferee or designee of
the Purchaser as part of the Mortgage File, and the terms of which are reflected
in the Mortgage Loan Schedule);
(xi) A lender's policy of title insurance together with a condominium
endorsement and extended coverage endorsement, if applicable, and, with respect
to each Adjustable Rate Mortgage Loan, an adjustable rate mortgage endorsement
in an amount at least equal to the balance of the Mortgage Loan as of the
Cut-off Date or a commitment (binder) to issue the same was effective on the
date of the origination of each Mortgage Loan, each such policy is valid and
remains in full force and effect, the transfer of the related Mortgage Loan to
the Purchaser and the Trustee does not affect the validity or enforceability of
such policy and each such policy was issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located and
acceptable to Xxxxxx Mae or Xxxxxxx Mac and in a form acceptable to Xxxxxx Mae
or Xxxxxxx Mac on the date of origination of such Mortgage Loan, which policy
insures the Seller and successor owners of indebtedness secured by the insured
Mortgage, as to the first or second, as the case may be, priority lien of the
Mortgage; to the best of the Seller's knowledge, no claims have been made under
such mortgage title insurance policy and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such mortgage title insurance policy;
(xii) Each Mortgage Loan was originated by, or generated on behalf of, the
Seller, or originated by a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority, or by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act;
(xiii) With respect to each Adjustable Rate Mortgage Loan, on each Adjustment
Date, the Mortgage Rate will be adjusted to equal the Index plus the Gross
Margin, rounded to the nearest 0.125%, subject to the Periodic Rate Cap, the
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Maximum Mortgage Rate and the Minimum Mortgage Rate. The related Mortgage Note
is payable on the first day of each month in self-amortizing monthly
installments of principal and interest (unless such Mortgage Loan is a mortgage
loan that requires the payment of interest only with respect to some or all of
the related monthly payments as indicated on the Mortgage Loan Schedule), with
interest payable in arrears, and requires a Monthly Payment which is sufficient
to fully amortize the outstanding principal balance of the Mortgage Loan over
its remaining term and to pay interest at the applicable Mortgage Rate. No
Mortgage Loan is subject to negative amortization. All rate adjustments have
been performed in accordance with the terms of the related Mortgage Note or
subsequent modifications, if any;
(xiv) To the best of the Seller's knowledge, all of the improvements which were
included for the purpose of determining the Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property;
(xv) All inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate
authorities and to the best of the Seller's knowledge, the Mortgaged Property is
lawfully occupied under applicable law;
(xvi) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located;
(xvii) The Mortgage Note and the related Mortgage are genuine, and each is the
legal, valid and binding obligation of the Mortgagor enforceable against the
Mortgagor by the mortgagee or its representative in accordance with its terms,
except only as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by law. To the best of the Seller's knowledge,
all parties to the Mortgage Note and the Mortgage had full legal capacity to
execute all Mortgage Loan documents and to convey the estate purported to be
conveyed by the Mortgage and each Mortgage Note and Mortgage have been duly and
validly executed by such parties;
(xviii) The proceeds of each Mortgage Loan have been fully disbursed, there is
no requirement for future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loans were paid;
(xix) The related Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(xx) With respect to each Mortgage constituting a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly designated
and currently so serves and is named in such Mortgage, and no fees or expenses
are or will become payable by the Purchaser to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor;
(xxi) There exist no deficiencies with respect to escrow deposits and payments,
if such are required, for which customary arrangements for repayment thereof
have not been made, and no escrow deposits or payments of other charges or
payments due the Seller have been capitalized under the Mortgage or the related
Mortgage Note;
(xxii) The origination, underwriting and collection practices used by the Seller
with respect to each Mortgage Loan have been in all material respects legal,
proper, prudent and customary in the subprime mortgage servicing business. Each
Mortgage Loan is currently being serviced by Washington Mutual Bank, FA;
(xxiii) There is no pledged account or other security other than real estate
securing the Mortgagor's obligations;
(xxiv) No Mortgage Loan has a shared appreciation feature, or other contingent
interest feature;
(xxv) [reserved];
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(xxvi) The improvements upon each Mortgaged Property are covered by a valid and
existing hazard insurance policy with a generally acceptable carrier that
provides for fire extended coverage and coverage of such other hazards as are
customarily covered by hazard insurance policies with extended coverage in the
area where the Mortgaged Property is located representing coverage not less than
the lesser of the outstanding principal balance of the related Mortgage Loan or
the minimum amount required to compensate for damage or loss on a replacement
cost basis. All individual insurance policies and flood policies referred to in
this clause (xxvi) and in clause (xxvii) below contain a standard mortgagee
clause naming the Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the Seller has received no notice that any premiums
due and payable thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood insurance, at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(xxvii) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as subject to special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the original
outstanding principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973;
(xxviii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note; and neither the Seller
nor any other entity involved in originating or servicing the Mortgage Loan has
waived any default, breach, violation or event of acceleration;
(xxix) Each Mortgaged Property is improved by a one- to four-family residential
dwelling, including condominium units and dwelling units in planned unit
developments, which, to the best of the Seller's knowledge, does not include
cooperatives and does not constitute property other than real property under
state law;
(xxx) There is no obligation on the part of the Seller or any other party under
the terms of the Mortgage or related Mortgage Note to make payments in addition
to those made by the Mortgagor;
(xxxi) Any future advances made prior to the Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term reflected on the related Mortgage Loan Schedule. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(xxxii) Each Mortgage Loan was underwritten in accordance with the Seller's
underwriting guidelines as described in the Prospectus Supplement as applicable
to its credit grade in all material respects;
(xxxiii) Each appraisal of a Mortgage Loan that was used to determine the
appraised value of the related Mortgaged Property was conducted generally in
accordance with the Seller's underwriting guidelines, and included an assessment
by the appraiser of the fair market value of the related Mortgaged Property at
the time of the appraisal. The Mortgage File contains an appraisal of the
applicable Mortgaged Property;
(xxxiv) None of the Mortgage Loans is a graduated payment Mortgage Loan, nor is
any Mortgage Loan subject to a temporary buydown or similar arrangement;
(xxxv) As of the Cut-off Date, there were no Mortgage Loans with respect to
which the monthly payment due thereon in March, 2004 had not been made, none of
the Mortgage Loans has been contractually delinquent for more than 30 days more
than once during the preceding twelve months and, no Mortgage Loan has ever
experienced a delinquency of 60 or more days since the origination thereof;
(xxxvi) Each Mortgage contains a provision that is, to the extent not prohibited
by federal or state law, enforceable for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written consent of the
mortgagee thereunder;
(xxxvii) To the best of the Seller's knowledge no misrepresentation, negligence,
fraud or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
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(xxxviii) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
(xxxix) The information set forth in the Prepayment Charge Schedule is complete,
true and correct in all material respects at the date or dates respecting which
such information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable law upon the
Mortgagor's voluntary Principal Prepayment (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary prepayment). No Mortgage Loan originated
before October 1, 2002 has a Prepayment Charge for a term in excess of five
years from the date of its origination and no Mortgage Loan originated on or
after October 1, 2002 has a prepayment charge for a term in excess of three
years from the date of its origination;
(xl) The Loan-to-Value Ratio for each Mortgage Loan was no greater than 100% at
the time of origination;
(xli) The first date on which each Mortgagor must make a payment on the related
Mortgage Note is no later than 60 days from the date of this Agreement;
(xlii) With respect to each Mortgage Loan, the related Mortgagor shall not fail
or has not failed to make the first Monthly Payment due under the terms of the
Mortgage Loan by the second succeeding Due Date after the Due Date on which such
Monthly Payment was due;
(xliii) The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions in effect in any relevant
jurisdiction, except any as may have been complied with;
(xliv) There are no defaults in complying with the terms of the Mortgage, and
either (1) any taxes, governmental assessments, insurance premiums, water, sewer
and municipal charges or ground rents which previously became due and owing have
been paid, or (2) an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Except for payments in the nature of
escrow payments, including without limitation, taxes and insurance payments, the
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required by the Mortgage Note, except for interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is greater, to the day which precedes by one month
the Due Date of the first installment of principal and interest;
(xlv) There is no proceeding pending, or to best of the Seller's knowledge
threatened, for the total or partial condemnation of the Mortgaged Property or
the taking by eminent domain of any Mortgaged Property;
(xlvi) No Mortgage Loan is subject to the requirements of the Home Ownership and
Equity Protection Act of 1994, as amended, or is a "high cost" or "predatory"
loan under any state or local law or regulation applicable to the originator. In
the event that Financial Security Assurance, Inc. becomes a NIMS Insurer, no
Mortgage Loan will be a "covered" loan under the laws of the states of
California, Colorado or Ohio;
(xlvii) No proceeds from any Mortgage Loans were used to finance single-premium
credit insurance policies. No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
(xlviii) The Seller did not select the Mortgage Loans with the intent to
adversely affect the interests of the Purchaser;
(xlix) The Seller has not received any notice that any Mortgagor has filed for
any bankruptcy or similar legal protection;
(l) No Group I Mortgage Loan is a "High-Cost Home Loan" as defined in the
Georgia Fair Lending Act, as amended (the "Georgia Act"), and no Mortgage Loan
that was originated on or after October 1, 2002 and before March 7, 2003, is
secured by a Mortgaged Property located in the State of Georgia;
(li) No Group I Mortgage Loan is a "High Cost Home Loan" as defined in the
Kentucky high-cost loan statute effective June 24, 2003 (Ky. Rev. Stat. Section
360.100);
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(lii) No Group I Mortgage Loan is a "High Cost Home Loan" as defined in the New
Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46; 10B-22 et
seq.);
(liii) No Group I Mortgage Loan is a subsection 10 mortgage under the Oklahoma
Home Ownership and Equity Protection Act;
(liv) No Group I Mortgage Loan is a "High-Cost Home Loan" as defined in New York
Banking Law 6-1;
(lv) No Group I Mortgage Loan is a "High Cost Home Loan" as defined in the
Arkansas Home Loan Protection Act effective July 16, 2003 (Act 1340 of 2003);
(lvi) No Group I Mortgage Loan is a "High-Cost Home Loan" as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Am. xx.xx.
58-21A-1 et seq.);
(lvii) No Group I Mortgage Loan is a "High-Risk Home Loan" as defined in the
Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat.
137/1 et seq.);
(lviii) Each Group I Mortgage Loan was originated in compliance with the
following anti-predatory lending guidelines:
a. Each Group I Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for Xxxxxx Xxx Xxxxxxx (the "Lender Letter");
b. No borrower was encouraged or required by the Seller to select a Group I
Mortgage Loan product offered by the Group I Mortgage Loan's originator which is
a higher cost product designed for less creditworthy borrowers, unless at the
time of the Group I Mortgage Loan's origination, such borrower did not qualify
taking into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Group I Mortgage Loan's originator or any
affiliate of the Group I Mortgage Loan's originator;
c. The methodology used in underwriting the extension of credit for each Group I
Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology provided reasonable assurance that at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Group I Mortgage Loan;
d. With respect to any Group I Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity, (i) the
Seller's pricing methods include mortgage loans with and without prepayment
premiums; borrowers selecting Group I Mortgage Loans which include such
prepayment premiums receive a monetary benefit, including but not limited to a
rate or fee reduction, in exchange for selecting a Group I Mortgage Loan with a
prepayment premium, (ii) prior to the Group I Mortgage Loan's origination, the
borrower had the opportunity to choose between an array of mortgage loan
products which included mortgage loan products with prepayment premiums and
mortgage loan products that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the borrower in the loan documents pursuant
to applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the Master Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;
e. All points and fees related to each Group I Mortgage Loan were disclosed in
writing to the borrower in accordance with applicable state and federal law.
Except in the case of a Group I Mortgage Loan in an original principal amount of
less than $60,000 which would have resulted in an unprofitable origination, no
borrower was charged "points and fees" (whether or not financed) in an amount
greater than 5% of the principal amount of such loan, such 5% limitation
calculated in accordance with the Lender Letter;
f. All fees and charges (including finance charges) and whether or not financed,
assessed, collected or to be collected in connection with the origination and
servicing of each Group I Mortgage Loan have been disclosed in writing to the
borrower in accordance with applicable state and federal law and regulation; and
(lix) No Group I Mortgage Loan had a principal balance at origination in excess
of Xxxxxx Mae's conforming loan balance limitations for single family loans set
forth in the Xxxxxx Xxx Charter Act and the Xxxxxx Mae Selling Guide in effect
at the time of such Group I Mortgage Loan's origination.
(lx) With respect to each Group I Mortgage Loan, information regarding the
borrower credit file related to such Mortgage Loan has been furnished to credit
reporting agencies in compliance with the provisions of the Fair Credit
Reporting Act and the applicable implementing regulations.
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(lxi) No Group I Mortgage Loan had a principal balance at origination in excess
of Xxxxxxx Mac's dollar amount limits for one-to-four-family mortgage loans in
effect at the time of such Group I Mortgage Loan's origination.
SECTION 7. Repurchase Obligation for Defective Documentation and for Breach of
Representation and Warranty.
(a) The representations and warranties contained in Section 5(ix) and Section 6
shall not be impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Seller or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of holders of asset-backed
certificates evidencing an interest in all or a portion of the Mortgage Loans.
With respect to the representations and warranties contained herein which are
made to the knowledge or the best of knowledge of the Seller, or as to which the
Seller has no knowledge, if it is discovered that the substance of any such
representation and warranty was inaccurate as of the date such representation
and warranty was made or deemed to be made, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest therein
of the Purchaser or the Purchaser's assignee, transferee or designee, then
notwithstanding the lack of knowledge by the Seller with respect to the
substance of such representation and warranty being inaccurate at the time the
representation and warranty was made, the Seller shall take such action
described in the following paragraph in respect of such Mortgage Loan.
Upon discovery by the Seller, the Purchaser or any assignee, transferee or
designee of the Purchaser of any materially defective document in, or that any
material document was not transferred by the Seller (as listed on the Trustee's
initial certification), as part of any Mortgage File or of a breach of any of
the representations and warranties contained in Section 5 or Section 6 that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Purchaser or the Purchaser's assignee, transferee or designee (it being
understood that with respect to the representations and warranties set forth in
the last sentence of (xxxix), (xlvi) and the first sentence of (xlvii) of
Section 6 herein, a breach of any such representation or warranty shall in and
of itself be deemed to materially and adversely affect the interest therein of
the Purchaser and the Purchaser's assignee, transferee or designee) in any
Mortgage Loan, the party discovering the breach shall give prompt written notice
to the others. Within ninety (90) days of the earlier of the discovery or the
Seller's receipt of notice of any such missing documentation which was not
transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty, the Seller
promptly shall deliver such missing document or cure such defect or breach in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall, within 90
days of its discovery or receipt of notice, either (i) repurchase the affected
Mortgage Loan at a price equal to the Purchase Price (as defined in the Pooling
and Servicing Agreement) or (ii) pursuant to the provisions of the Pooling and
Servicing Agreement, cause the removal of such Mortgage Loan from the Trust Fund
and substitute one or more Qualified Substitute Mortgage Loans; provided,
however, that in the case of a breach of the representation and warranty
concerning the Mortgage Loan Schedule contained in Section 6(i), if such breach
relates to any field on the Mortgage Loan Schedule which identifies any
Prepayment Charge and such Prepayment Charge has been triggered pursuant to the
terms of the related Mortgage Note, then in lieu of purchasing such Mortgage
Loan from the Trust Fund at the Purchase Price (as defined in the Pooling and
Servicing Agreement), the Seller shall pay the amount of the incorrectly
identified Prepayment Charge (net of any amount previously collected by or paid
to the Trust Fund in respect of such Prepayment Charge), and the Seller shall
have no obligation to repurchase or substitute for such Mortgage Loan. In the
event of a substitution permitted hereunder, the Seller shall amend the Closing
Schedule to reflect the withdrawal of each removed Mortgage Loan from the terms
of this Agreement and the Pooling and Servicing Agreement and the addition of
the Qualified Substitute Mortgage Loan(s). The Seller shall deliver to the
Purchaser such amended Closing Schedule and shall deliver such other documents
as are required by this Agreement or the Pooling and Servicing Agreement within
five (5) days of any such amendment. Any repurchase pursuant to this Section
7(a) shall be accomplished by deposit in the Collection Account of the amount of
the Purchase Price (as defined in the Pooling and Servicing Agreement) in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement and any
remedy by the Seller for a breach of a representation or warranty that
materially and adversely affects the value of any Prepayment Charge shall be
made in a manner consistent with Section 2.03(c) of the Pooling and Servicing
Agreement.
(b) It is understood and agreed that the obligations of the Seller set forth in
this Section 7 to cure, repurchase or substitute for a defective Mortgage Loan
constitute the sole remedies of the Purchaser against the Seller respecting a
missing or defective document or a breach of the representations and warranties
contained in Section 5 or Section 6.
SECTION 8. Closing; Payment for the Mortgage Loans.
The closing of the purchase and sale of the Mortgage Loans and the Yield
Maintenance Agreements shall be held at the Seattle office of Xxxxxx Xxxxxx
White & XxXxxxxxx LLP at 9:30 am New York time on the Closing Date (or such
other location or time as is mutually agreeable to the parties).
The Purchaser's obligation to close the transactions contemplated by this
Agreement shall be subject to each of the following conditions:
(a) All of the representations and warranties of the Seller under this Agreement
shall be true and correct in all material respects as of the date as of which
they are made and no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement;
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(b) The Purchaser shall have received, or the attorneys of the Purchaser shall
have received in escrow (to be released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the respective
terms thereof;
(c) The Seller shall have delivered or caused to be delivered and released to
the Purchaser or to its designee, all documents (including without limitation,
the Mortgage Loans) required to be so delivered by the Purchaser pursuant to
Section 2.01 of the Pooling and Servicing Agreement; and
(d) All other terms and conditions of this Agreement to be complied with by
Seller, shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall deliver or cause to be
delivered to the Seller on the Closing Date, against delivery and release by the
Seller to the Trustee of all documents required pursuant to the Pooling and
Servicing Agreement, the consideration for the Mortgage Loans and the Yield
Maintenance Agreements as specified in Section 3 of this Agreement, by delivery
to the Seller of the Purchase Price in immediately available funds and delivery
of the Long Beach Certificates to the Seller or, upon the direction of the
Seller, to Long Beach Asset Holdings Corp.
SECTION 9. Closing Documents.
Without limiting the generality of Section 8 hereof, the closing shall be
subject to delivery of each of the following documents:
(a) An Officers' Certificate of the Seller, dated the Closing Date, upon which
the Purchaser and Greenwich Capital Markets, Inc. (the "Representative") and the
NIMS Insurer, if any, may rely and attached thereto copies of the certificate of
incorporation, bylaws and certificate of good standing of the Seller under the
laws of the State of Delaware;
(b) An Officers' Certificate of the Seller, dated the Closing Date, upon which
the Purchaser, the Representative and the NIMS Insurer, if any, may rely, with
respect to certain facts regarding the sale of the Mortgage Loans, by the Seller
to the Purchaser;
(c) An Opinion of Counsel of the Seller (which may be in-house counsel of the
Seller), dated the Closing Date and addressed to the Purchaser, the
Representative and the NIMS Insurer, if any;
(d) Such opinions of counsel as the Rating Agencies, the Representative, the
Trustee or the NIMS Insurer, if any, may reasonably request in connection with
the sale of the Mortgage Loans and the Yield Maintenance Agreements by the
Seller to the Purchaser or the Seller's execution and delivery of, or
performance under, this Agreement;
(e) A letter from Deloitte & Touche L.L.P., certified public accountants, dated
the date hereof and to the effect that they have performed certain specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature set forth in the Prospectus
Supplement under the captions "Summary of Terms--Mortgage Loans", "Risk
Factors", "The Mortgage Pool" and "Long Beach Mortgage Company" agrees with the
records of the Seller;
(f) The Seller shall deliver to the Purchaser for inclusion in the Prospectus
Supplement under the caption "Long Beach Mortgage Company" or for inclusion in
other offering materials, such publicly available information regarding the
Seller, its financial condition and its mortgage loan delinquency, foreclosure
and loss experience, underwriting standards, lending activities and loan sales,
production, and servicing and collection practices, and any similar nonpublic,
unaudited financial information and a computer tape with respect to the pool
information, as the Representative may reasonably request;
(g) Letters from at least two nationally recognized statistical rating agencies
rating the Offered Certificates (as defined in the Prospectus Supplement); and
(h) Such further information, certificates, opinions and documents as the
Purchaser or the Representative may reasonably request.
SECTION 10. Costs.
The Seller shall pay (or shall reimburse the Purchaser or any other Person to
the extent that the Purchaser or such other Person shall pay) all costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Yield Maintenance Agreements, including without limitation,
recording fees, fees for title policy endorsements and continuations and the
fees for recording Assignments, the fees and expenses of the Seller's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with determining the Seller's loan loss, foreclosure and delinquency
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experience, the costs and expenses incurred in connection with obtaining the
documents referred to in Sections 9(d) and 9(e), the cost of an opinion of
counsel regarding the true sale of the Mortgage Loans and the Yield Maintenance
Agreements and non-consolidation of the Seller, the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the Prospectus
Supplement, any blue sky filings and private placement memorandum relating to
the Certificates and other related documents, costs and expenses of the Trustee,
the fees and expenses of the Purchaser's counsel in connection with the
preparation of all documents relating to the securitization of the Mortgage
Loans, the filing fee charged by the Securities and Exchange Commission for
registration of the Certificates, the cost of any opinions of outside special
counsel that may be required for the Seller and the fees charged by any Rating
Agency to rate the Certificates. All other costs and expenses in connection with
the transactions contemplated hereunder shall be borne by the party incurring
such expense.
SECTION 11. Servicing.
The Seller has represented to the Purchaser that the Mortgage Loans are being
serviced in accordance with the terms of the Pooling and Servicing Agreement,
and it is understood and agreed by and between the Seller and the Purchaser that
any interim servicing arrangements with the Seller will be superseded by the
servicing arrangements set forth in the Pooling and Servicing Agreement.
SECTION 12. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans and the Yield
Maintenance Agreements in accordance with the terms and conditions of this
Agreement is mandatory. It is specifically understood and agreed that each
Mortgage Loan is unique and identifiable on the Closing Date and that an award
of money damages would be insufficient to compensate the Purchaser for the
losses and damages incurred by the Purchaser in the event of the Seller's
failure to deliver the Mortgage Loans on or before the Closing Date.
The Seller hereby grants to the Purchaser a lien on and a continuing security
interest in the Seller's interest in each Mortgage Loan and each Yield
Maintenance Agreement, and each document and instrument evidencing each such
Mortgage Loan and each Yield Maintenance Agreement to secure the performance by
the Seller of its obligation hereunder, and the Seller agrees that it holds such
Mortgage Loans and such Yield Maintenance Agreements in custody for the
Purchaser, subject to (i) the Purchaser's right, prior to the Closing Date, to
reject any Mortgage Loan to the extent permitted by this Agreement and (ii) the
Purchaser's obligation to deliver or cause to be delivered the consideration for
the Mortgage Loans and the Yield Maintenance Agreements pursuant to Section 8
hereof. Any Mortgage Loan rejected by the Purchaser shall concurrently therewith
be automatically released from the security interest created hereby. The Seller
agrees that, upon acceptance of the Mortgage Loans and the Yield Maintenance
Agreements by the Purchaser or its designee and delivery of payment to the
Seller, that any security interest held by the Seller in such Mortgage Loans and
such Yield Maintenance Agreements shall be released.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively. Notwithstanding the foregoing, if
on the Closing Date, each of the conditions set forth in Section 8 hereof shall
have been satisfied and the Purchaser shall not have paid or caused to be paid
the Purchase Price, or shall not have delivered or caused to be delivered the
Long Beach Certificates to the Seller or, upon the direction of the Seller, to
Long Beach Asset Holding Corp., or any such condition shall not have been waived
or satisfied and the Purchaser determines not to pay or cause to be paid the
Purchase Price or not to deliver or cause to be delivered the Long Beach
Certificates to Long Beach Asset Holding Corp, the Purchaser shall immediately
effect the re-delivery of the Mortgage Loans and the Yield Maintenance
Agreements, if delivery to the Purchaser has occurred and any security interest
created by this Section 12 shall be deemed to have been released.
SECTION 13. Notices.
All demands, notices and communications hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by telex or telegraph and
confirmed by a similar mailed writing, if to the Purchaser, addressed to the
Purchaser at 0000 Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBSC
Legal Counsel, or such other address as may hereafter be furnished to the Seller
in writing by the Purchaser; if to the Seller, addressed to the Seller at 0000
Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBMC Legal Counsel, or to
such other address as the Seller may designate in writing to the Purchaser.
SECTION 14. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.
SECTION 15. Agreement of Parties.
The Seller and the Purchaser each agree to execute and deliver such instruments
(including UCC financing statements and continuation statements) and take such
actions as either of the others may, from time to time, reasonably request in
order to effectuate the purpose and to carry out the terms of this Agreement and
the Pooling and Servicing Agreement.
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SECTION 16. Survival.
The Seller agrees that the representations, warranties and agreements made by it
herein and in any certificate or other instrument delivered pursuant hereto
shall be deemed to be relied upon by the Purchaser and its successors and
assigns, notwithstanding any investigation heretofore or hereafter made by the
Purchaser or on its behalf, and that the representations, warranties and
agreements made by the Seller herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans and
the Yield Maintenance Agreements and shall continue in full force and effect,
notwithstanding any restrictive or qualified endorsement on the Mortgage Notes
and notwithstanding subsequent termination of this Agreement, the Pooling and
Servicing Agreement or the Trust Fund.
SECTION 17. Indemnification, Representative.
(a) The Seller indemnifies and holds harmless the Purchaser, the Purchaser's
officers and directors and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act of 1933, as amended (the
"1933 Act") or Section 20 of the Exchange Act of 1934, as amended, (the
"Exchange Act"), as follows:
(i) against any and all losses, claims, expenses, damages or liabilities, joint
or several, to which the Purchaser or such controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof, including, but not limited to, any
loss, claim, expense, damage or liability related to purchases and sales of the
Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates,
the Class A-4 Certificates, the Mezzanine Certificates and the Class B
Certificates arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Prospectus Supplement, or
any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading;
and will reimburse, as incurred, the Purchaser and each such controlling person
for any legal or other expenses reasonably incurred by the Purchaser or such
controlling person in connection with investigating, defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Seller will be liable in any such case only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission, or alleged untrue statement or omission, made therein in
reliance upon and in conformity with written information furnished to the
Purchaser by the Seller specifically for use in the preparation thereof (the
"Seller's Prospectus Supplement Information");
(ii) against any and all loss, liability, claim, damage and expense whatsoever,
to the extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Seller; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Purchaser, subject to Section 17(c)
below), reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under clause (i) or clause (ii) above.
This indemnity agreement will be in addition to any liability which the Seller
may otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless the Seller, each of its
directors, each of its officers and each person, if any, who controls the Seller
within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange
Act, against any and all losses, claims, expenses, damages or liabilities to
which the Seller or any such director, officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement, other than in the Seller's Prospectus
Supplement Information, or arise out of, or are based upon, the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein not misleading, and will
reimburse any legal or other expenses reasonably incurred by the Seller or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Purchaser may otherwise
have.
(c) Promptly after receipt by an indemnified party under this Section 17 of
notice of the commencement of any action described therein, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 17, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party under this Section 17 unless the indemnifying party is materially
prejudiced by such omission to notify and in any event the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
the indemnified party otherwise than under this Agreement. In case any such
action is brought against any indemnified party, and it notifies the
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indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and, to the extent that it may wish to do so,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party (such consent not to be
unreasonably withheld, conditioned or delayed), be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
under this Section 17, such indemnifying party shall not be liable for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and
preparation for a defense.
Any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless: (i)
the employment thereof has been specifically authorized by the indemnifying
party in writing (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and in
the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel; (iii) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (iv) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action on behalf of such indemnified party, it being understood, however,
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing (i) by the Seller if the indemnified parties
under this Section 17 consist of the Seller or any of its officers, directors or
controlling persons, or (ii) the Purchaser, if the indemnified party under this
Section 17 consist of the Purchaser or any of the Purchaser's directors,
officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements contained in
Section 17(a) and Section 17(b), shall use its reasonable efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld, conditioned or delayed), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability (to the extent set forth in Section 17(a) or
Section 17(b) as applicable) by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or failure to act by or
on behalf of an indemnified party.
Notwithstanding the foregoing paragraph, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.
(d) If the indemnification provided for in Section 17(a) or 17(b) is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Purchaser on the
one hand and the Seller on the other from the offering of the Underwritten
Certificates (as defined in the Prospectus Supplement) or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Purchaser on the one
hand and the Seller on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. If the indemnification provided for in
Section 17(b) is unavailable or insufficient to hold harmless the indemnified
party under Section 17(b), then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in Section 17(b) in such proportion
as appropriate to reflect the relative fault of the Purchaser on one hand and
the Seller on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Purchaser on the one hand and the Seller on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Purchaser bear to the total underwriting
discounts and commissions received by the Underwriters (as defined in the
Prospectus Supplement). The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Purchaser or by the Seller and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to above in the
first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 18. Representations and Warranties of the Seller Relating to the Yield
Maintenance Agreements.
The Seller hereby represents and warrants to the Purchaser, that as of the
Closing Date with respect to each Yield Maintenance Agreement:
(a) Immediately prior to the assignment of the Yield Maintenance Agreement to
the Purchaser, the Seller had good title to, and was the sole legal and
beneficial owner of, the Yield Maintenance Agreement, free and clear of any
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pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind created by the Seller, and has full right and authority, subject to no
interest or participation of, or agreement with, any other party to sell and
assign the same. Upon the delivery, transfer or assignment of the Yield
Maintenance Agreement to the Purchaser as contemplated herein, the Purchaser
will receive the Yield Maintenance Agreement, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind
created by the Seller;
(b) Each Yield Maintenance Agreement constitutes "general intangibles" within
the meaning of the applicable UCC;
(c) The Seller has received all consents and approvals required by the terms of
each Yield Maintenance Agreement for the sale of such Yield Maintenance
Agreement hereunder to the Purchaser;
(d) The Seller has caused or will have caused, within ten days after the Closing
Date, the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law as necessary to
perfect the security interest in each Yield Maintenance Agreement granted to the
Purchaser hereunder; and
(e) The Seller has not authorized the filing of and is not aware of any
financing statements against Seller that include a description of collateral
covering either of the Yield Maintenance Agreements other than any financing
statement (a) relating to the security interest granted to the Purchaser
hereunder or (b) that has been terminated.
SECTION 19. Governing Law.
THIS AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
SECTION 20. Miscellaneous.
This Agreement may be executed in two or more counterparts, each of which when
so executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans and the Yield Maintenance Agreements by the Seller to the
Purchaser as provided in Section 4 hereof be, and be construed as, a sale of the
Mortgage Loans and the Yield Maintenance Agreements by the Seller to the
Purchaser and not as a pledge of the Mortgage Loans and the Yield Maintenance
Agreements by the Seller to the Purchaser to secure a debt or other obligation
of the Seller. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans and the Yield Maintenance Agreements
are held to be property of the Seller, then, (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans and the
Yield Maintenance Agreements by the Seller to the Purchaser to secure a debt or
other obligation of the Seller and (b) (1) this Agreement shall also be deemed
to be a security agreement within the meaning of Articles 8 and 9 of the New
York Uniform Commercial Code; (2) the conveyance provided for in Section 4
hereof shall be deemed to be a grant by the Seller to the Purchaser of a
security interest in all of the Seller's right, title and interest in and to the
Mortgage Loans, the Yield Maintenance Agreements and all amounts payable to the
holders of the Mortgage Loans and the Yield Maintenance Agreements in accordance
with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of the Mortgage Notes, the Yield
Maintenance Agreements, the related Mortgages and such other items of property
that constitute instruments, money, negotiable documents or chattel paper shall
be deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the New York Uniform Commercial
Code; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to Section 4(d)
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the Yield Maintenance Agreements, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
SECTION 21. Third Party Beneficiary.
Each of the Trustee and the NIMS Insurer, if any, shall be a third-party
beneficiary hereof (except with respect to Section 17) and shall be entitled to
enforce the provisions hereof as if a party hereto, except the provisions of
Section 17 hereof. The Co-Representatives, on behalf of the Underwriters (as
C-15
defined in the Prospectus Supplement), shall be a third-party beneficiary hereof
solely with respect to Section 17 and shall be entitled to enforce the
provisions of Section 17 as if it were a party hereto.
C-16
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to be
signed by their respective officers thereunto duly authorized as of the date
first above written.
LONG BEACH SECURITIES CORP.
By: _________________________
Name: Xxxxxxx X Xxxxxxxx
Title: Vice President
LONG BEACH MORTGAGE COMPANY
By: _________________________
Name: Xxxxxxx X Xxxxxxxx
Title: First Vice President
C-17
SCHEDULE A
Yield Maintenance Agreements
Provider Transaction Reference
-------- ---------------------
Deutsche Bank AG N299288N, N299289N
Deutsche Bank AG N299270N, N299292N
Deutsche Bank AG N299281N, N299287N
C-18
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Copies of the Mortgage Loan Schedule (which has been intentionally omitted from
this filing) may be obtained from Long Beach Securities Corp. by contacting:
Xxxxx Xxxxx
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
D-1
\ EXHIBIT E-1
REQUEST FOR RELEASE
(for Trustee /Custodian)
Loan Information
Name of Mortgagor:
--------------------------------------------------
Master Servicer
Loan No.:
--------------------------------------------------
Trustee /Custodian
Name:
--------------------------------------------------
Address:
--------------------------------------------------
Trustee/
Custodian
Mortgage File No.:
--------------------------------------------------
Depositor
Name: LONG BEACH SECURITIES CORP.
Address:
--------------------------------------------------
Certificates: Long Beach Mortgage Certificates, Series 2004-2.
E-1
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of Long Beach
Mortgage Loan Trust 2004-2, Asset-Backed Certificates, Series 2004-2, the
documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given them
in the Pooling and Servicing Agreement, dated as of May 1, 2004, among the
Trustee, the Depositor and the Master Servicer (the "Pooling and Servicing
Agreement").
(a) Promissory Note dated _______________, 20__, in the original principal sum
of $__________, made by ___________________, payable to, or endorsed to the
order of, the Trustee.
(b) Mortgage recorded on _____________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________ in book/reel/docket _________________
of official records at page/image _____________.
(c) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
(d) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
___________________ as instrument no. _________ in the County Recorder's Office
of the County of _______________, State of _______________________ in
book/reel/docket ____________ of official records at page/image ____________.
(e) Other documents, including any amendments, assignments or other assumptions
of the Mortgage Note or Mortgage.
(f) _____________________________________________
(g) _____________________________________________
(h) _____________________________________________
(i) _____________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.
E-2
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Collection Account and except
as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be ear-marked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
Dated:
LONG BEACH MORTGAGE COMPANY
By:
--------------------------------
Name:
Title:
E-3
EXHIBIT E-2
REQUEST FOR RELEASE
(Certificate - Mortgage Loan Paid in Full)
OFFICERS' CERTIFICATE AND TRUST RECEIPT
MORTGAGE LOAN PASS-THROUGH CERTIFICATES
SERIES 2004-2
____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER:________________________ BORROWER'S NAME:_________________________
COUNTY:_____________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
DATED: _____________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
E-4
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of May 1, 2004 among Long Beach Securities Corp., Long Beach
Mortgage Company and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2004-2, Asset-Backed Certificates, Series 2004-2
Ladies and Gentlemen:
Pursuant to Section 2.02 of the Pooling and Servicing Agreement, the
undersigned, as Trustee, hereby acknowledges receipt of each Mortgage File and
certifies that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed hereto as not being covered by this
certification), (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(e) of the Pooling and Servicing
Agreement) required to be delivered to it pursuant to the Pooling and Servicing
Agreement are in its possession, (ii) such documents have been reviewed by it
and are not mutilated, torn or defaced unless initialed by the related borrower
and relate to such Mortgage Loan and (iii) based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (i), (ii), (ix), (xii), (xiv) (to the extent of the
Periodic Rate Cap for the first Adjustment Date and subsequent Adjustment Dates)
and (xvi) of the definition of "Mortgage Loan Schedule" of the Pooling and
Servicing Agreement accurately reflects information set forth in the Mortgage
File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
due authorization, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
F-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Long Beach Securities Corp. Long Beach Mortgage Company
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of May 1, 2004 among Long Beach Securities Corp., Long Beach
Mortgage Company and Deutsche Bank National Trust Company, Long Beach
Mortgage Loan Trust 2004-2, Asset-Backed Certificates, Series 2004-2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned 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 the attachment hereto), it or a Custodian on its
behalf has received:
(a) the original Mortgage Note, endorsed in blank or in the following
form: "Pay to the order of Deutsche Bank National Trust Company, as Trustee
under the applicable agreement, without recourse," with all prior and
intervening endorsements showing a complete chain of endorsement from the
originator to the Person so endorsing to the Trustee or a copy of such original
Mortgage Note with an accompanying Lost Note Affidavit executed by the Seller;
(b) the original Mortgage with evidence of recording thereon, and a
copy, certified by the appropriate recording office, of the recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon;
(c) an original Assignment in blank;
(d) the original recorded Assignment or Assignments showing a complete
chain of assignment from the originator to the Person assigning the Mortgage to
the Trustee or in blank;
(e) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(f) the original lender's title insurance policy, together with all
endorsements or riders issued with or subsequent to the issuance of such policy
(or a copy of the above, in the case of the Washington Mutual Mortgage Loans),
insuring the priority of the Mortgage as a first lien on the Mortgaged Property
represented therein as a fee interest vested in the Mortgagor, or in the event
such title policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow company.
F-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
F-3
EXHIBIT G
[RESERVED]
G-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to administer
oaths, who first being duly sworn deposes and says: Deponent is of , successor
by merger to ("Seller") and who has personal knowledge of the facts set out in
this affidavit.
On ______________, __________________________did execute and deliver a
promissory note in the principal amount of $______________________.
That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing Deutsche
Bank National Trust Company, as Trustee on behalf of Long Beach Mortgage Loan
Trust 2004-2, to accept the transfer of the above described loan from Seller.
Seller agrees to indemnify Deutsche Bank National Trust Company, Long
Beach Securities Corp. and Long Beach Mortgage Company harmless for any losses
incurred by such parties resulting from the above described promissory note has
been lost or misplaced.
By:
-------------------------------
STATE OF )
) SS:
COUNTY OF )
On this ______ day of ______________, 20_, before me, a Notary Public,
in and for said County and State, appeared ____________________, who
acknowledged the extension of the foregoing and who, having been duly sworn,
states that any representations therein contained are true.
Witness my hand and Notarial Seal this _________ day of 20__.
My commission expires .
----------------------
H-1
EXHIBIT I
FORM OF ERISA REPRESENTATION
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Long Beach Mortgage Company
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-2,
Asset-Backed Certificates, Series 2004-2
Ladies and Gentlemen:
___________________ (the "Transferee") intends to acquire from
__________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of the Class [____] Certificate of Long Beach Mortgage Loan
Trust 2004-2, Asset-Backed Certificates, Series 2004-2, (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Pooling and Servicing Agreement. The Transferee hereby
certifies, represents and warrants to, and covenants with the Depositor, the
Trustee and the Master Servicer that the following statements in either (1) or
(2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, 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 C.F.R. ss.
2510.3-101; or
_____ (2) The Transferee will provide an Opinion of Counsel to the Depositor,
the Trustee and the Master Servicer which establishes to the satisfaction of the
Depositor, the Trustee and the Master Servicer that the purchase of such
I-1
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 Trustee, the Master Servicer, or the Trust Fund
to any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in this Agreement.
IN WITNESS WHEREOF, the Transferee executed this certificate.
_______________________________________
[Transferee]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
I-2
EXHIBIT J-1A
Form of Class B Certificate Transferor Certificate
[Date]
[TRUSTEE]
Re: Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates Series
2004-2 (the "Class B Certificates")
Ladies and Gentlemen:
This certificate is being delivered in connection with the sale by
[___________________] (the "Transferor") to [_______________] (the "Transferee")
of Class B Certificates having an Initial Certificate Principal Balance as of
May 4, 2004 (the "Closing Date") of [$____________] (the "Transferred
Certificates"). The Class B Certificates, including the Transferred
Certificates, were issued pursuant to the Pooling and Servicing Agreement dated
as of May 1, 2004 (the "Agreement") among Long Beach Securities Corp., as
depositor (the "Depositor"), Long Beach Mortgage Company, as master servicer
(the "Master Servicer") and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). All capitalized terms used but not otherwise defined herein
shall have the respective meanings set forth in the Agreement. The Transferor
hereby certifies, represents and warrants to you, as Trustee, and for the
benefit of the Trustee, the Depositor, the Trust Fund and the Transferee, that:
1. The Transferor is the lawful owner of the Transferred Certificates with the
full right to transfer such Class B Certificates free from any and all claims
and encumbrances whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a) offered,
transferred, pledged, sold or otherwise disposed of any Transferred Certificate,
any interest in any Transferred Certificate or any other similar security to any
person in any manner, (b) solicited any offer to buy or accept a transfer,
pledge or other disposition of any Transferred Certificate, any interest in any
Transferred Certificate or any other similar security from any person in any
manner, (c) otherwise approached or negotiated with respect to any Transferred
Certificate, any interest in any Transferred Certificate or any other similar
security with any person in any manner, (d) made any general solicitation by
means of general advertising or in any other manner, or (e) taken any other
J-1A-1
action, which (in the case of any of the acts described in clauses (a) through
(e) hereof) would constitute a distribution of any Transferred Certificate under
the Securities Act of 1933, as amended (the "Securities Act"), or would render
the disposition of any Transferred Certificate a violation of Section 5 of the
Securities Act or any state securities laws, or would require registration or
qualification of any Transferred Certificate pursuant to the Securities Act or
any state securities laws.
3. The Transferor and any person acting on behalf of the Transferor in this
matter reasonably believe that the Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A ("Rule 144A") under the Securities
Act (a "Qualified Institutional Buyer") purchasing for its own account or for
the account of a Qualified Institutional Buyer. In determining whether the
Transferee is a Qualified Institutional Buyer, the Transferor and any person
acting on behalf of the Transferor in this matter have relied upon the following
method(s) of establishing the Transferee's ownership and discretionary
investments of securities (check one or more):
___ (a) The Transferee's most recent publicly available financial statements,
which statements present the information as of a date within 16 months preceding
the date of sale of the Transferred Certificate in the case of a U.S. purchaser
and within 18 months preceding such date of sale for a foreign purchaser; or
___ (b) The most recent publicly available information appearing in documents
filed by the Transferee with the Securities and Exchange Commission or another
United States federal, state, or local governmental agency or self-regulatory
organization, or with a foreign governmental agency or self-regulatory
organization, which information is as of a date within 16 months preceding the
date of sale of the Transferred Certificate in the case of a U.S. purchaser and
within 18 months preceding such date of sale for a foreign purchaser; or
___ (c) The most recent publicly available information appearing in a recognized
securities manual, which information is as of a date within 16 months preceding
the date of sale of the Transferred Certificate in the case of a U.S. purchaser
and within 18 months preceding such date of sale for a foreign purchaser; or
___ (d) A certification by the chief financial officer, a person fulfilling an
equivalent function, or other executive officer of the Transferee, specifying
the amount of securities owned and invested on a discretionary basis by the
Transferee as of a specific date on or since the close of the Transferee's most
recent fiscal year, or, in the case of a Transferee that is a member of a
"family of investment companies", as that term is defined in Rule 144A, a
certification by an executive officer of the investment adviser specifying the
amount of securities owned by the "family of investment companies" as of a
specific date on or since the close of the Transferee's most recent fiscal year.
4. The Transferor and any person acting on behalf of the Transferor understand
that in determining the aggregate amount of securities owned and invested on a
discretionary basis by an entity for purposes of establishing whether such
entity is a Qualified Institutional Buyer:
J-1A-2
(a) the following instruments and interests shall be excluded: securities of
issuers that are affiliated with the Transferee; if the Transferee is a dealer
securities that are part of an unsold allotment to or subscription by the
Transferee as a participant in a public offering; securities of issuers that are
part of the Transferee's "family of investment companies", if the Transferee is
a registered investment company; bank deposit notes and certificates of deposit;
loan participations; repurchase agreements; securities owned but subject to a
repurchase agreement; and currency, interest rate and commodity swaps;
(b) the aggregate value of the securities shall be the cost of such securities,
except where the entity reports its securities holdings in its financial
statements on the basis of their market value, and no current information with
respect to the cost of those securities has been published, in which case the
securities may be valued at market;
(c) securities owned by subsidiaries of the entity that are consolidated with
the entity in its financial statements prepared in accordance with generally
accepted accounting principles may be included if the investments of such
subsidiaries are managed under the direction of the entity, except that, unless
the entity is a reporting company under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, securities owned by such subsidiaries may not
be included if the entity itself is a majority-owned subsidiary that would be
included in the consolidated financial statements of another enterprise.
5. The Transferor or a person acting on its behalf has taken reasonable steps to
ensure that the Transferee is aware that the Transferor is relying on the
exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A.
6. The Transferor or a person acting on its behalf has furnished, or caused to
be furnished, to the Transferee all information requested by the Transferee
regarding (a) the Transferred Certificates and payments thereon, (b) the nature
and performance of the Mortgage Loans, (c) the Agreement, and (d) any credit
enhancement mechanism associated with the Transferred Certificates.
Very truly yours,
___________________________
(Transferor)
By:________________________
Name:
Title:
J-1A-3
EXHIBIT J-1B
Form of Class B Certificate Transferee Certificate
[Date]
[TRUSTEE]
Re: Long Beach Mortgage Loan Trust 2004-2, Asset-Backed Certificates
Series 2004-2(the "Class B Certificates")
Ladies and Gentlemen:
[___________________] (the "Transferee") intends to purchase from
___________________ (the "Transferor") Class B Certificates having an Initial
Certificate Principal Balance as of May 1, 2004 (the "Closing Date") of
[$____________] (the "Transferred Certificates"). The Class B Certificates,
including the Transferred Certificates, were issued pursuant to the Pooling and
Servicing Agreement dated as of May 4, 2004 (the "Agreement") among Long Beach
Securities Corp., as depositor (the "Depositor"), Long Beach Mortgage Company,
as master servicer (the "Master Servicer") and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Agreement. The
Transferee hereby certifies, represents and warrants to you, as Trustee, and for
the benefit of the Trustee, the Depositor, the Trust Fund and the Transferor,
that:
1. The Transferee is a "qualified institutional buyer" (a "Qualified
Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A") under
the Securities Act of 1933, as amended (the "Securities Act"), and has completed
one of the forms of certification to that effect attached hereto as Annex 1 and
Annex 2. The Transferee is aware that the sale to it of the Transferred
Certificates is being made in reliance on Rule 144A. The Transferee is acquiring
the Transferred Certificates for its own account or for the account of a
Qualified Institutional Buyer, and understands that such Transferred
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.
2. The Transferee has been furnished with all information requested by it
regarding (a) the Transferred Certificates and payments thereon, (b) the nature
and performance of the the Mortgage Loans, (c) the Agreement, and (d) any credit
enhancement mechanism associated with the Transferred Certificates.
3. The Transferee represents that any of (a) or (b) is satisfied, as marked
below:
____ a. it is neither: (1) an employee benefit plan, or other retirement
arrangement, including individual retirement accounts and annuities, Xxxxx plans
and collective investment funds and separate accounts in which such plans,
accounts or arrangements are invested, including, without limitation, insurance
J-1B-1
company general accounts, that is subject to ERISA or the Code (each, a "Plan"),
nor (2) any Person who is directly or indirectly purchasing such Transferred
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with "plan assets" (as defined under the DOL Regulation at 29 C.F.R.
Section 2510.3-101) of a Plan; or
____ b. the Transferee is an insurance company and (a) the source of funds used
to purchase or hold such Transferred 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 (c) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied.
Very truly yours,
_______________________________
(Transferee)
By:_____________________________
Name:
Title:
X-0X-0
XXXXX 0 XX XXXXXXX X-0X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Trustee], as Trustee, with respect to the Class B
Certificates being transferred (the "Transferred Certificates") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity
purchasing the Transferred Certificates (the "Transferee").
2. The Transferee 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 Transferee owned and/or invested on a discretionary basis
$______________________ in securities (other than the excluded securities
referred to below) as of the end of the Transferee's most recent fiscal year
(such amount being calculated in accordance with Rule 144A) and (ii) the
Transferee satisfies the criteria in the category marked below.
___Corporation, etc. The Transferee is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar business
trust, partnership, or any organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Transferee (a) is a national bank or a banking institution
organized under the laws of any State, U.S. 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, as of a date not more than 16 months
preceding the date of sale of the Transferred Certificate in the case of a U.S.
bank, or a banking institution organized under the laws of any State, U.S.
territory or the District of Columbia, and not more than 18 months preceding
such date of sale for a foreign bank or equivalent institution.
___ Savings and Loan. The Transferee (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, as of a date not more than 16
months preceding the date of sale of the Transferred Certificate in the case of
a U.S. savings and loan association, building and loan association, cooperative
bank, homestead association or similar institution, and not more than 18 months
preceding such date of sale for a foreign savings and loan association or
equivalent institution.
J-1B-3
___ Broker-dealer. The Transferee is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Transferee 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, U.S.
territory or the District of Columbia.
___ State or Local Plan. The Transferee 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 Transferee is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Advisor. The Transferee is an investment advisor registered under
the Investment Advisers Act of 1940, as amended.
___ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection (a)(1) of
Rule 144A pursuant to which it qualifies. Note that registered investment
companies should complete Annex 2 rather than this Annex 1.)
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee, (ii) if the Transferee is a
dealer, securities that are part of an unsold allotment to or subscription by
the Transferee as a participant in a public offering, (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. For purposes of determining
the aggregate amount of securities owned and/or invested on a discretionary
basis by the Transferee, the Transferee did not include any of the securities
referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, the Transferee used the
cost of such securities to the Transferee, unless the Transferee reports its
securities holdings in its financial statements on the basis of their market
value, and no current information with respect to the cost of those securities
has been published, in which case the securities were valued at market. Further,
J-1B-4
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Transferred
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Transferred Certificates Yes No
only for the Transferee's own account?
6. If the answer to the foregoing question is "no", then in each case where the
Transferee is purchasing for an account other than its own, such account belongs
to a third party that is itself a "qualified institutional buyer" within the
meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such notice
is given, the Transferee's purchase of the Transferred Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties any
updated annual financial statements that become available on or before the date
of such purchase, promptly after they become available.
Print Name of Transferee
By:
-------------------------------
Name:
Title:
Date:
X-0X-0
XXXXX 0 XX XXXXXXX X-0X
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor] (the
"Transferor") and [name of Trustee], as Trustee, with respect to the Class B
Certificates being transferred (the "Transferred Certificates") as described in
the Transferee Certificate to which this certification relates and to which this
certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity
purchasing the Transferred Certificates (the "Transferee") or, if the Transferee
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A"), because the Transferee is
part of a Family of Investment Companies (as defined below), is an executive
officer of the investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in Rule 144A
because (i) the Transferee is an investment company registered under the
Investment Company Act of 1940, as amended, and (ii) as marked below, the
Transferee alone owned and/or invested on a discretionary basis, or the
Transferee's Family of Investment Companies owned, at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used, unless the
Transferee or any member of the Transferee's Family of Investment Companies, as
the case may be, reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the
cost of those securities has been published, in which case the securities of
such entity were valued at market.
____ The Transferee owned and/or invested on a discretionary basis
[$__________________] in securities (other than the excluded securities referred
to below) as of the end of the Transferee's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Transferee 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 Transferee'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
J-1B-6
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 Transferee or are part of the Transferee's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, or owned by
the Transferee's Family of Investment Companies, the securities referred to in
this paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the parties to
which this certification is being made are relying and will continue to rely on
the statements made herein because one or more sales to the Transferee will be
in reliance on Rule 144A.
____ ____ Will the Transferee be purchasing the Transferred Certificates
only for the Transferee's own account?
Yes No
6. If the answer to the foregoing question is "no", then in each case where the
Transferee is purchasing for an account other than its own, such account belongs
to a third party that is itself a "qualified institutional buyer" within the
meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Transferee through one or more of the
appropriate methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice, the
Transferee's purchase of the Transferred Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
__________________________________________
Print Name of Transferee or Adviser
By:_______________________________________
Name:
Title:
IF AN ADVISER:
Print Name of Transferee
Date:
J-1B-7
EXHIBIT J-2
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-2,
Asset-Backed Certificates Series 2004-2
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2004-2 Asset-Backed Certificates, Series 2004-2 (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee"),
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
J-2-1
executed and delivered to you a certificate to substantially the same effect as
this certificate, and (3) the purchaser or transferee has otherwise complied
with any conditions for transfer set forth in the Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By:
----------------------------------------
Authorized Officer
J-2-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-2,
Asset-Backed Certificates Series 2004-2
Ladies and Gentlemen:
In connection with our acquisition of $______ Initial Certificate
Principal Balance of the Class [__] Certificate of Long Beach Mortgage Loan
Trust 2004-2 Asset-Backed Certificates, Series 2004-2 (the "Certificates"),
issued pursuant to a Pooling and Servicing Agreement dated as of May 1, 2004
(the "Agreement") among Long Beach Securities Corp., as depositor (the
"Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee"),
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
J-2-3
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:
---------------------------------------
Authorized Officer
X-0-0
XXXXX 0 XX XXXXXXX X-0
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 chief financial officer, a person
fulfilling an equivalent function, 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 at least $100,000,000 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 any 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 a banking institution organized
under the laws of any State, U.S. 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, as of a date not more than 16 months preceding the
date of sale of the Certificates in the case of a U.S. bank or a banking
institution organized under the laws of any State, U.S. territory or the
District of Columbia, and not more than 18 months preceding such date of sale
for a foreign bank or equivalent institution.
_____ 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, as of a date not more than 16
months preceding the date of sale of the Certificates in the case of a U.S.
savings and loan association, building and loan association, cooperative bank,
homestead association or similar institution, and not more than 18 months
J-2-5
preceding such date of sale for a foreign savings and loan association, or
equivalent institution.
_____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934, as amended.
_____ 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, U.S.
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 Advisers Act of 1940.
_____ Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection (a)(1) of
Rule 144A pursuant to which it qualifies. Note that registered investment
companies should complete Annex 2 rather than this Annex 1.) ______________
3.. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) if the Buyer is a dealer,
securities that are part of an unsold allotment to or subscription by the Buyer
as a participant in a public offering, (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. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer did not include any of the securities referred to in this paragraph.
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, except the Buyer reports its securities holdings in its
financial statements on the basis of their market value, and no current
information with respect to the cost of those securities has been published, in
which case, the securities were valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
J-2-6
____ ____ Will the Buyer be purchasing the Certificates only for
Yes No the Buyer's own account?
6. If the answer to the foregoing question is "no", then in each case where the
Buyer is purchasing for an account other than its own, such account belongs to a
third party that is itself a "qualified institutional buyer" within the meaning
of Rule 144A, and the "qualified institutional buyer" status of such third party
has been established by the Buyer through one or more of the appropriate methods
contemplated by Rule 144A.
7. Until the date of purchase of the Rule 144A Securities, the Buyer will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan as 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:
-------------------------------------------
X-0-0
XXXXX 0 XX XXXXXXX X-0
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 chief financial officer,
a person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Certificates 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 an executive officer of the
investment adviser (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 owned and/or invested on a
discretionary basis, 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 where the
Buyer or any member of the Buyer's Family of Investment Companies, as the case
may be, reports its securities holdings in its financial statements on the basis
of their market value, and no current information with respect to the cost of
those securities has been published, in which case, the securities of such
entity were valued at market.
_____ The Buyer owned and/or invested on a discretionary basis, $_________ 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) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
J-2-8
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, or owned by the Buyer's
Family of Investment Companies, the securities referred to in this paragraph
were excluded.
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.
____ ____ Will the Buyer be purchasing the Certificates only for the
Transferee's own account?
Yes No
6. If the answer to the foregoing question is "no", then in each case
where the Buyer is purchasing for an account other than its own, such account
belongs to a third party that is itself a "qualified institutional buyer" within
the meaning of Rule 144A, and the "qualified institutional buyer" status of such
third party has been established by the Buyer through one or more of the
appropriate methods contemplated by Rule 144A.
7. 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-2-9
EXHIBIT K
Form of Class R Certificate, Class R-CX Certificate
and Class R-PX Certificate Transfer Affidavit
TRANSFER AFFIDAVIT AND AGREEMENT
LONG BEACH MORTGAGE LOAN TRUST 2004-2,
ASSET-BACKED CERTIFICATES, SERIES 2004-2
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ________________________, the
proposed Transferee of an Ownership Interest in the Class [___] Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement") among Long Beach Securities Corp., as depositor (the "Depositor"),
Long Beach Mortgage Company, as master servicer (the "Master Servicer") and
Deutsche Bank National Trust Company, as trustee (the "Trustee"). Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof and will be, as of the date
of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) of
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
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 L to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is _____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, if a significant purpose of the transfer was to impede the assessment
or collection of tax. The Transferee understands that, as the holder of a
noneconomic residual interest, the Transferee may incur tax liabilities in
excess of any cash flows generated by the Certificate. The Transferee intends to
pay taxes associated with holding the Certificate as they become due.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
Vice President, attested by its Secretary, this ___ day of
[----------].
[Transferee NAME]
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
[Corporate Seal]
ATTEST:
_______________________________
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 ____, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Long Beach Securities Corp.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Re: Long Beach Mortgage Loan Trust 2004-2,
Asset-Backed Certificates Series 2004-2
Ladies and Gentlemen:
In connection with our disposition of the Class [__] Certificates (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement dated as
of May 1, 2004 (the "Agreement") among Long Beach Securities Corp., as depositor
(the "Depositor"), Long Beach Mortgage Company, as master servicer (the "Master
Servicer") and Deutsche Bank National Trust Company, as trustee (the "Trustee")
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act, (c)
to the extent we are disposing of the Class [__] Certificate, we have no
knowledge that the Transferee is not a Permitted Transferee and (d) no purpose
of the proposed disposition of the Class [__] Certificate is to impede the
assessment or collection of tax.
Very truly yours,
TRANSFEROR
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
L-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE
AVAILABLE UPON REQUEST
SCHEDULE II
CAP PREMIUM SCHEDULE
Class A-1 Class A-1
Distribution Date Scheduled Notional Amount ($)(1) LIBOR (%)
---------------------------------- -------------------------------- -------------
June 25, 2004.................... $930,616,401 6.10%
July 25, 2004.................... $904,844,414 6.31%
August 25, 2004.................. $879,320,939 6.10%
September 25, 2004............... $854,035,057 6.10%
October 25, 2004................. $828,977,872 6.31%
November 25, 2004................ $804,142,722 6.11%
December 25, 2004................ $779,524,649 6.31%
January 25, 2005................. $755,120,823 6.11%
February 25, 2005................ $730,930,404 6.11%
March 25, 2005................... $706,958,562 6.77%
April 25, 2005.................. $683,582,408 6.11%
May 25, 2005..................... $660,805,568 6.32%
June 25, 2005.................... $638,613,118 6.11%
July 25, 2005.................... $616,990,118 6.32%
August 25, 2005.................. $595,921,943 6.12%
September 25, 2005............... $575,394,442 6.12%
October 25, 2005................. $555,393,791 6.32%
November 25, 2005................ $535,906,536 6.12%
December 25, 2005................ $516,919,430 6.32%
January 25, 2006................. $498,419,685 6.12%
February 25, 2006................ $480,394,812 6.12%
March 25, 2006................... $462,832,976 7.52%
April 25, 2006.................. $445,797,244 6.82%
May 25, 2006..................... $429,200,341 7.06%
June 25, 2006.................... $413,024,177 6.83%
July 25, 2006.................... $397,261,590 7.06%
August 25, 2006.................. $381,902,014 6.83%
September 25, 2006............... $366,935,423 7.48%
October 25, 2006................. $352,406,559 7.77%
November 25, 2006................ $338,250,366 7.52%
December 25, 2006................ $324,455,364 7.77%
January 25, 2007................. $311,011,884 7.52%
February 25, 2007................ $297,910,954 7.52%
March 25, 2007................... $285,144,048 9.07%
April 25, 2007.................. $272,745,383 8.26%
May 25, 2007..................... $260,665,598 8.53%
June 25, 2007.................... $260,665,598 8.26%
July 25, 2007.................... $260,665,598 8.53%
August 25, 2007.................. $260,665,598 8.26%
September 25, 2007............... $260,665,598 8.91%
October 25, 2007................. $260,665,598 9.25%
November 25, 2007................ $258,028,369 8.95%
December 25, 2007................ $251,450,355 9.25%
January 25, 2008................. $245,039,021 8.95%
February 25, 2008................ $238,790,146 8.95%
March 25, 2008................... $0 0.00%
(1) The "Class A-1 Scheduled Notional Amount" for any Distribution Date will be
equal to the lesser of (i) the amount set forth in this Annex II for such
Distribution Date and (ii) the aggregate Certificate Principal Balance of
the Class A-1 Certificates immediately prior to such Distribution Date.
II-1
Class A-2/3/4 Class A-2/3/4
Distribution Date Scheduled Notional Amount ($)(1) LIBOR (%)
---------------------------------- -------------------------------- -------------
June 25, 2004.................... $291,936,878 5.80%
July 25, 2004.................... $283,206,137 5.99%
August 25, 2004.................. $274,632,424 5.80%
September 25, 2004............... $266,210,829 5.81%
October 25, 2004................. $257,937,307 6.01%
November 25, 2004................ $249,807,709 5.81%
December 25, 2004................ $241,818,062 6.01%
January 25, 2005................. $233,965,218 5.81%
February 25, 2005................ $226,247,628 5.81%
March 25, 2005................... $218,666,332 6.45%
April 25, 2005.................. $211,273,510 5.83%
May 25, 2005..................... $204,073,930 6.02%
June 25, 2005.................... $197,062,271 5.83%
July 25, 2005.................... $190,233,676 6.02%
August 25, 2005.................. $183,583,353 5.83%
September 25, 2005............... $177,106,665 5.84%
October 25, 2005................. $170,799,327 6.04%
November 25, 2005................ $164,656,914 5.84%
December 25, 2005................ $158,674,913 6.04%
January 25, 2006................. $152,849,213 5.85%
February 25, 2006................ $147,175,686 5.86%
March 25, 2006................... $141,650,715 7.34%
April 25, 2006.................. $136,297,788 6.64%
May 25, 2006..................... $131,084,399 6.88%
June 25, 2006.................... $126,003,155 6.66%
July 25, 2006.................... $121,054,163 6.88%
August 25, 2006.................. $116,233,949 6.67%
September 25, 2006............... $111,539,430 7.43%
October 25, 2006................. $106,987,473 7.69%
November 25, 2006................ $102,553,775 7.46%
December 25, 2006................ $98,235,536 7.71%
January 25, 2007................. $94,029,272 7.46%
February 25, 2007................ $89,932,056 7.47%
March 25, 2007................... $85,941,260 9.13%
April 25, 2007.................. $82,069,746 8.30%
May 25, 2007..................... $78,299,367 8.60%
June 25, 2007.................... $78,299,367 8.32%
July 25, 2007.................... $78,299,367 8.60%
August 25, 2007.................. $78,299,367 8.33%
September 25, 2007............... $78,299,367 9.08%
October 25, 2007................. $78,299,367 9.41%
November 25, 2007................ $78,299,367 9.12%
December 25, 2007................ $76,830,218 9.42%
January 25, 2008................. $74,837,382 9.12%
February 25, 2008................ $72,895,896 9.13%
March 25, 2008................... $0 0.00%
(1) The "Class A-2/3/4 Scheduled Notional Amount" for any Distribution Date
will be equal to the lesser of (i) the amount set forth in this Annex II
for such Distribution Date and (ii) the aggregate Certificate Principal
Balances of the Group II Senior Certificates immediately prior to such
Distribution Date.
II-2
Subordinate Subordinate
Distribution Date Scheduled Notional Amount ($)(1) LIBOR (%)
---------------------------------- -------------------------------- -------------
June 25, 2004.................... $247,100,000 6.03%
July 25, 2004.................... $247,100,000 6.23%
August 25, 2004.................. $247,100,000 6.03%
September 25, 2004............... $247,100,000 6.03%
October 25, 2004................. $247,100,000 6.24%
November 25, 2004................ $247,100,000 6.04%
December 25, 2004................ $247,100,000 6.24%
January 25, 2005................. $247,100,000 6.04%
February 25, 2005................ $247,100,000 6.04%
March 25, 2005................... $247,100,000 6.69%
April 25, 2005.................. $247,100,000 6.05%
May 25, 2005..................... $247,100,000 6.25%
June 25, 2005.................... $247,100,000 6.05%
July 25, 2005.................... $247,100,000 6.25%
August 25, 2005.................. $247,100,000 6.05%
September 25, 2005............... $247,100,000 6.05%
October 25, 2005................. $247,100,000 6.25%
November 25, 2005................ $247,100,000 6.05%
December 25, 2005................ $247,100,000 6.26%
January 25, 2006................. $247,100,000 6.05%
February 25, 2006................ $247,100,000 6.06%
March 25, 2006................... $247,100,000 7.48%
April 25, 2006.................. $247,100,000 6.78%
May 25, 2006..................... $247,100,000 7.01%
June 25, 2006.................... $247,100,000 6.79%
July 25, 2006.................... $247,100,000 7.01%
August 25, 2006.................. $247,100,000 6.79%
September 25, 2006............... $247,100,000 7.47%
October 25, 2006................. $247,100,000 7.75%
November 25, 2006................ $247,100,000 7.51%
December 25, 2006................ $247,100,000 7.76%
January 25, 2007................. $247,100,000 7.50%
February 25, 2007................ $247,100,000 7.51%
March 25, 2007................... $247,100,000 9.09%
April 25, 2007.................. $247,100,000 8.27%
May 25, 2007..................... $247,100,000 8.55%
June 25, 2007.................... $235,301,586 8.27%
July 25, 2007.................... $220,566,201 8.55%
August 25, 2007.................. $206,206,632 8.27%
September 25, 2007............... $192,213,578 8.95%
October 25, 2007................. $178,618,883 9.28%
November 25, 2007................ $168,009,286 8.99%
December 25, 2007................ $163,147,191 9.29%
January 25, 2008................. $158,970,530 8.99%
February 25, 2008................ $154,900,127 8.99%
March 25, 2008................... $0 0.00%
(1) The "Subordinate Scheduled Notional Amount" for any Distribution Date will
be equal to the lesser of (i) the amount set forth in this Annex II for
such Distribution Date and (ii) the aggregate Certificate Principal
Balances of the Mezzanine Certificates and the Class B Certificates
immediately prior to such Distribution Date.
II-3
SCHEDULE III
[RESERVED]
SCHEDULE IV
PMI MORTGAGE LOAN SCHEDULE
NOT APPLICABLE
