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ASSET BACKED FUNDING CORPORATION,
Depositor
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2004
ABFC 2004-HE1 Trust
ABFC Asset-Backed Certificates, Series 2004-HE1
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms..................................................
Section 1.02 Accounting.....................................................
Section 1.03 Rights of the NIMS Insurer.....................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans...................................
Section 2.02 Acceptance by Trustee..........................................
Section 2.03 Repurchase or Substitution of Mortgage Loans by an
Originator or the Seller.......................................
Section 2.04 [Reserved].....................................................
Section 2.05 Representations, Warranties and Covenants of the
Master Servicer................................................
Section 2.06 Representations and Warranties of the Depositor................
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests......................................................
ARTICLE III
ADMINISTRATION AND MASTER SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer......................
Section 3.02 Monitoring of Servicers........................................
Section 3.03 Maintenance of Primary Mortgage Insurance Policy; Claims.......
Section 3.04 Rights of the Depositor, the Securities Administrator and
the Trustee in Respect of the Master Servicer..................
Section 3.05 Trustee to Act as Master Servicer..............................
Section 3.06 Collection Accounts............................................
Section 3.07 Master Servicer Custodial Account, Distribution
Account and Reserve Accounts...................................
Section 3.08 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts................................................
Section 3.09 Permitted Withdrawals from the Master Servicer
Custodial Account and the Distribution Account.................
Section 3.10 Maintenance of Hazard Insurance................................
Section 3.11 Presentment of Claims and Collection of Proceeds...............
Section 3.12 Realization Upon Defaulted Mortgage Loans; REO Property........
Section 3.13 Due-on-Sale Clauses; Assumption and Substitution Agreements....
Section 3.14 Trustee to Cooperate; Release of Files.........................
Section 3.15 Master Servicing Compensation..................................
Section 3.16 Annual Statement as to Compliance..............................
Section 3.17 Annual Independent Certified Public Accountants' Reports.......
Section 3.18 Access to Certain Documentation and Information
Regarding the Mortgage Loans...................................
Section 3.19 Duties of Credit Risk Manager..................................
Section 3.20 Liability of Master Servicer; Indemnification..................
Section 3.21 Limitation of Liability of the Credit Risk Manager.............
Section 3.22 No Personal Solicitation.......................................
Section 3.23 Periodic Filings...............................................
Section 3.24 Fidelity Bond; Errors and Omissions Insurance..................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.........................................
Section 4.02 Distributions of Principal and Monthly
Excess Cashflow Amounts........................................
Section 4.03 Allocation of Losses...........................................
Section 4.04 Method of Distribution.........................................
Section 4.05 Distributions on Book-Entry Certificates.......................
Section 4.06 Statements.....................................................
Section 4.07 Remittance Reports.............................................
Section 4.08 REMIC Distributions............................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................
Section 5.02 Registration of Transfer and Exchange of Certificates..........
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..............
Section 5.04 Persons Deemed Owners..........................................
Section 5.05 Appointment of Paying Agent....................................
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.............
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor...........
Section 6.03 Master Servicer Not to Resign..................................
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Event of Termination...........................
Section 7.02 Remedies of Trustee............................................
Section 7.03 Directions by Certificateholders and Duties of
Trustee During Master Servicer Event of Termination............
Section 7.04 Action upon Certain Failures of the Master Servicer
and upon Master Servicer Event of Termination..................
Section 7.05 Trustee to Act; Appointment of Successor.......................
Section 7.06 Notification to Certificateholders.............................
ARTICLE VIII
THE TRUSTeE and the securities administrator
Section 8.01 Duties of Trustee and Securities Administrator.................
Section 8.02 Certain Matters Affecting the Trustee and the Securities
Administrator..................................................
Section 8.03 Neither the Trustee nor the Securities Administrator
Liable for Certificates or Mortgage Loans......................
Section 8.04 Trustee and Securities Administrator May Own Certificates......
Section 8.05 Securities Administrator's Fees and Expenses and
Trustee Fees and Expenses......................................
Section 8.06 Eligibility Requirements for Trustee and the Securities
Administrator..................................................
Section 8.07 Resignation or Removal of Trustee and the Securities
` Administrator..................................................
Section 8.08 Successor Trustee or Securities Administrator..................
Section 8.09 Merger or Consolidation of Trustee or Securities
Administrator..................................................
Section 8.10 Appointment of Co-Trustee or Separate Trustee..................
Section 8.11 Limitation of Liability........................................
Section 8.12 Trustee or Securities Administrator May Enforce
Claims Without Possession of Certificates......................
Section 8.13 Suits for Enforcement..........................................
Section 8.14 Waiver of Bond Requirement.....................................
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement......
Section 8.16 Appointment of Custodian.......................................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration...........................................
Section 9.02 Prohibited Transactions and Activities.........................
Section 9.03 Indemnification with Respect to Certain Taxes
and Loss of REMIC Status.......................................
Section 9.04 Grantor Trust Administration...................................
ARTICLE X
TERMINATION
Section 10.01 Termination....................................................
Section 10.02 Additional Termination Requirements............................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment......................................................
Section 11.02 Recordation of Agreement; Counterparts.........................
Section 11.03 Limitation on Rights of Certificateholders.....................
Section 11.04 Governing Law; Jurisdiction....................................
Section 11.05 Notices........................................................
Section 11.06 Severability of Provisions.....................................
Section 11.07 Article and Section References.................................
Section 11.08 Notice to the Rating Agencies and the NIMS Insurer.............
Section 11.09 Further Assurances.............................................
Section 11.10 Third Party Beneficiary........................................
Section 11.11 Acts of Certificateholders.....................................
EXHIBITS:
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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 B-1 Form of Class M-1 Certificates
Exhibit B-2 Form of Class M-2 Certificates
Exhibit B-3 Form of Class M-3 Certificates
Exhibit B-4 Form of Class M-4 Certificates
Exhibit B-5 Form of Class M-5 Certificates
Exhibit B-6 Form of Class M-6 Certificates
Exhibit B-7 Form of Class M-7 Certificates
Exhibit B-8 Form of Class M-8 Certificates
Exhibit B-9 Form of Class M-9 Certificates
Exhibit C-1 Form of Class CE Certificates
Exhibit C-2 Form of Class P Certificates
Exhibit C-3 Form of Class R Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Initial Certification
Exhibit F-2 Form of Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Master Servicer
Exhibit N Form of Yield Maintenance Agreements
Exhibit O Form of Certification
Exhibit P Form of Certification of the Securities Administrator to
be Provided to Master Servicer
ASSET BACKED FUNDING CORPORATION, as depositor (the "Depositor"),
XXXXX FARGO BANK, N.A., as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator"), and DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee (the
"Trustee"), are entering into this Pooling and Servicing Agreement, dated as of
August 1, 2004 (the "Agreement").
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 fifteen
Classes of Certificates, designated as (i) the Class A-1, Class A-2 and Class
A-3 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, (iii) the Class
CE Certificates, (iv) the Class P Certificates and (v) the Class R Certificate.
REMIC 1
As provided herein, the Securities Administrator will make an
election to treat the segregated pool of assets consisting of the Mortgage Loans
and certain other related assets subject to this Agreement (but exclusive of the
Yield Maintenance Agreements, the Reserve Accounts, the Cap Carryover Amounts,
the Prepayment Charges, the Originator Prepayment Charge Payment Amounts and the
Servicer Prepayment Charge Payment Amounts) as a real estate investment conduit
(a "REMIC") for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC 1." The Class R-1 Interest will represent the sole
class of "residual interests" in REMIC 1 for purposes of the REMIC Provisions
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
Regulations 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 Initial
REMIC Uncertificated Latest Possible Maturity
Designation Pass-Through Rate Balance Date
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LT1AA Variable((2)) $421,532,901.31 August 25, 2034
LT1A1 Variable((2)) $1,534,485.00 August 25, 2034
LT1A2 Variable((2)) $1,733,770.00 August 25, 2034
LT1A3 Variable((2)) $344,880.00 August 25, 2034
lt1M1 Variable((2)) $227,970.00 August 25, 2034
lt1m2 Variable((2)) $180,655.00 August 25, 2034
lt1m3 Variable((2)) $45,165.00 August 25, 2034
lt1M4 Variable((2)) $43,015.00 August 25, 2034
LT1M5 Variable((2)) $43,015.00 August 25, 2034
lt1M6 Variable((2)) $43,015.00 August 25, 2034
lt1M7 Variable((2)) $12,905.00 August 25, 2034
lt1M8 Variable((2)) $30,110.00 August 25, 2034
lt1M9 Variable((2)) $25,805.00 August 25, 2034
lt1ZZ Variable((2)) $4,337,922.27 Xxxxxx 00, 0000
xx0xx Variable((2)) $430,135,613.59 August 25, 2034
(1) Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as the
"latest possible maturity date" for each REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Securities Administrator shall make an
election to treat the segregated pool of assets consisting of the REMIC 1
Regular Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC 2." The Class R-2
Interest represents the sole class of "residual interests" in REMIC 2 for
purposes of the REMIC Provisions.
The following table sets forth (or describes) the Class
designation, Certificate Interest Rate and Original Class Certificate Principal
Balance for each Class of Certificates comprising the interests in the Trust
Fund created hereunder:
Original Class
Certificate Certificate Assumed Final
Class Principal Balance Interest Rate Maturity Dates
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A-1 $306,897,000.00 (1) June 25, 2022
A-2 $346,754,000.00 (2) October 25, 2032
A-3 $68,976,000.00 (3) April 25, 2034
M-1 $45,594,000.00 (4) March 25, 2034
M-2 $36,131,000.00 (5) January 25, 2034
M-3 $9,033,000.00 (6) November 25, 2033
M-4 $8,603,000.00 (7) October 25, 2033
M-5 $8,603,000.00 (8) August 25, 2033
M-6 $8,603,000.00 (9) June 25, 2033
M-7 $2,581,000.00 (10) January 25, 2033
M-8 $6,022,000.00 (11) November 25, 2032
M-9 $5,161,000.00 (12) January 25, 2032
CE (13) (13) N/A
P X/X X/X X/X
X X/X X/X X/X
Total $852,958,000.00
(1) Interest will accrue on the Class A-1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(2) Interest will accrue on the Class A-2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(3) Interest will accrue on the Class A-3 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(4) Interest will accrue on the Class M-1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-1
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(5) Interest will accrue on the Class M-2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-2
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(6) Interest will accrue on the Class M-3 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-3
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(7) Interest will accrue on the Class M-4 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-4
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(8) Interest will accrue on the Class M-5 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-5
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(9) Interest will accrue on the Class M-6 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-6
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(10) Interest will accrue on the Class M-7 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-7
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(11) Interest will accrue on the Class M-8 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-8
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(12) Interest will accrue on the Class M-9 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class M-9
Pass-Through Rate and (ii) the Pool Cap for such Distribution Date.
(13) Solely for REMIC purposes, the Class CE Certificates will have an
Original Class Certificate Principal Balance equal to the Initial
Overcollateralization Amount and will bear interest on their Notional
Amount.
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. Interest on all Classes of REMIC 1
Regular Interests and the Class CE Certificates will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. Interest on all Regular
Certificates (other than the Class CE Certificates) will be calculated on the
basis of the actual number of days in the related Interest Accrual Period and a
360-day year.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due and each Mortgage Loan relating to an REO Property.
"Account": Any of the Collection Accounts, the Master Servicer
Custodial Account, the Distribution Account, the Class A Reserve Account, the
Class M Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of Certificates, an amount equal to the interest accrued at the
Certificate Interest Rate described opposite such Class in the table in the
Preliminary Statement during the related Interest Accrual Period on the
Certificate Principal Balance of such Class of Certificates, reduced by such
Class' Interest Percentage of Relief Act Interest Shortfalls for such
Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate
at which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": With respect to each Servicer, the meaning given to
the term "Monthly Advance" in the applicable Servicing Agreement.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Aggregate Overcollateralization Release Amount": With respect to
any Distribution Date, the lesser of (i) the Principal Remittance Amount and
(ii) the Overcollateralization Release Amount.
"Agreement": This Pooling and Servicing Agreement and all
amendments and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto.
"Applied Realized Loss Amount": With respect to each Distribution
Date, the excess, if any, of (a) the aggregate of the Certificate Principal
Balances of the Certificates (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in any
Certificate Principal Balance as a result of Subsequent Recoveries) over (b) the
Pool Balance as of the end of the related Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates,
the date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal
to the excess of (i) the sum of (a) the aggregate of the Monthly Payments due
during the related Collection Period and received on or prior to the related
Determination Date by the Servicers, (b) Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments, Substitution Adjustment
Amounts, the Purchase Price for any repurchased Mortgage Loan, the Termination
Price with respect to the termination of the Trust pursuant to Section 10.01
hereof and other unscheduled recoveries of principal and interest (excluding
Prepayment Charges, Originator Prepayment Charge Payment Amounts, Servicer
Prepayment Charge Payment Amounts and Prepayment Interest Excess) in respect of
the Mortgage Loans during the related Prepayment Period, (c) the aggregate of
any amounts received in respect of REO Properties received on or prior to the
related Determination Date by the Servicers, (d) all Advances and payments of
Compensating Interest made by the applicable Servicer in respect of such
Distribution Date received on or prior to the related Remittance Date by the
Master Servicer and (e) any Reimbursement Amount or Subsequent Recovery
deposited into the Collection Accounts during the related Prepayment Period and
received on or prior to the related Remittance Date by the Master Servicer over
(ii) the sum of (a) amounts reimbursable to the Servicers pursuant to the
Servicing Agreements, (b) amounts reimbursable or payable to the Master Servicer
pursuant to this Agreement, including, without limitation, Sections 3.09 or
3.20, (c) amounts reimbursable or payable to the Securities Administrator or
Trustee pursuant to this Agreement, including, without limitation, Section 8.05
or Section 9.01(c), (d) the Servicing Fees and (e) amounts deposited in the
Master Servicer Custodial Account or Distribution Account in error.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates
shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of Delaware, the State of New York,
the State of New Jersey, the State of Maryland, the State of Minnesota, the
State of California or in the cities in which the Corporate Trust Offices of the
Securities Administrator and the Trustee are located are authorized or obligated
by law or executive order to be closed.
"Cap Amount": With respect to each Distribution Date and each
Class of Class M Certificates, the product of (a) the Class M Yield Maintenance
Agreement Payment for such Distribution Date and (b) a fraction, the numerator
of which is the Certificate Principal Balance of such Class immediately prior to
such Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of the Class M Certificates immediately prior to such
Distribution Date.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any Offered Certificate is based upon the Pool Cap, the
excess of (i) the amount of interest such Certificate would have been entitled
to receive on such Distribution Date based on the related Pass-Through Rate,
over (ii) the amount of interest such Certificate received on such Distribution
Date based on the Pool Cap, together with the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate on such Certificate).
"Certificate": Any Regular Certificate, Class P Certificate or
Class R Certificate.
"Certificate Custodian": Initially, Xxxxx Fargo Bank, N.A.;
thereafter any other Certificate Custodian acceptable to the Depository and
selected by the Securities Administrator.
"Certificate Interest Rate": With respect to each Distribution
Date and Class of Certificates, the per annum rate described in the table in the
Preliminary Statement during the related Interest Accrual Period on the
Certificate Principal Balance.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class CE, Class P and Class R Certificates) and any
Distribution Date, the Original Class Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually distributed in respect of principal of
such Class on all prior Distribution Dates and (ii) Applied Realized Loss
Amounts allocated thereto for previous Distribution Dates and (b) increased by
any Subsequent Recoveries allocated to such Class for previous Distribution
Dates. The Class CE, Class P and Class R Certificates do not have a Certificate
Principal Balance. With respect to any Certificate (other than a Class CE, Class
P or Class R Certificate) of a Class and any Distribution Date, the portion of
the Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of the Class
R Certificate for any purpose hereof.
"Certification": As defined in Section 3.23(b) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests
which have the same priority of payment and bear the same class designation and
the form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.130% per annum, and (ii) following
the Optional Termination Date, 0.260% per annum.
"Class A-1 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1 Certificate Margin and (b) the Maximum
Rate Cap.
"Class A-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.320% per annum, and (ii) following
the Optional Termination Date, 0.640% per annum.
"Class A-2 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-2 Certificate Margin and (b) the Maximum
Rate Cap.
"Class A-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.530% per annum, and (ii) following
the Optional Termination Date, 1.060% per annum.
"Class A-3 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-3 Certificate Margin and (b) the Maximum
Rate Cap.
"Class A Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx X-0 and Exhibit A-3, executed by the Securities
Administrator on behalf of the Trust and authenticated and delivered by the
Certificate Registrar, representing the right to distributions as set forth
herein and therein.
"Class A Certificateholders": Collectively, the Holders of the
Class A Certificates.
"Class A Reserve Account": The trust account created and
maintained by the Securities Administrator pursuant to Section 3.07(i) which
shall be entitled "Class A Reserve Account, Xxxxx Fargo Bank, N.A., as
Securities Administrator for Deutsche Bank Trust Company, as Trustee, in trust
for registered Holders of the Class A Certificates of the ABFC 2004-HE1 Trust,
ABFC Asset-Backed Certificates, Series 2004-HE1" and which must be an Eligible
Account. Amounts on deposit in the Class A Reserve Account shall not be
invested. The Class A Reserve Account shall not be an asset of any REMIC formed
under this Agreement.
"Class A Yield Maintenance Agreement": The interest rate cap
agreement between the Securities Administrator, on behalf of the Trust, and the
Class A Yield Maintenance Agreement Provider substantially in the form attached
hereto as Exhibit N. The Class A Yield Maintenance Agreement shall not be an
asset of any REMIC formed under this Agreement.
"Class A Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in June 2006, the amount equal
to the product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the applicable
strike rate for such Distribution Date, in each case as set forth on the
schedule attached to the confirmation to the Class A Yield Maintenance Agreement
for such Distribution Date, (b) the product of the cap notional amount and the
scale factor, both as set forth on the schedule attached to the confirmation to
the Class A Yield Maintenance Agreement for such Distribution Date and (c) a
fraction, the numerator of which is the actual number of days elapsed since the
previous Distribution Date (or the Closing Date, in the case of the first
Distribution Date) to but excluding the current Distribution Date and the
denominator of which is 360.
"Class A Yield Maintenance Agreement Provider": Swiss Re
Financial Products Corporation and any successor thereto.
"Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the Securities Administrator on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class CE Distributable Amount": With respect to any Distribution
Date, the sum of (i) the interest accrued on such Class CE Certificate at its
Pass-Through Rate calculated on its Notional Amount less the amount (without
duplication) of Cap Carryover Amounts paid pursuant to Section 4.02(b)(xxx),
(ii) any remaining Aggregate Overcollateralization Release Amounts, (iii) the
aggregate of amounts remaining in the Class A Reserve Account after the
distributions in Section 3.07(i)(i)(A) and (iv) the aggregate of amounts
remaining in the Class M Reserve Account after the distributions in Section
3.07(i)(ii)(A).
"Class CE Uncertificated Principal Balance": As of any date of
determination, the Initial Overcollateralization Amount minus the sum of (i) any
Realized Losses allocated thereto and (ii) any amounts distributed (or deemed
distributed) to the Class CE Certificates with respect thereto.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx X-0, Xxxxxxx X-0, Exhibit B-4, Exhibit X-0, Xxxxxxx X-0,
Xxxxxxx X-0, Exhibit B-8 and Exhibit B-9, executed by the Securities
Administrator on behalf of the Trust and authenticated and delivered by the
Certificate Registrar, representing the right to distributions as set forth
herein and therein.
"Class M Certificateholders": Collectively, the Holders of the
Class M Certificates.
"Class M Reserve Account": The trust account created and
maintained by the Securities Administrator pursuant to Section 3.07(i) which
shall be entitled "Class M Reserve Account, Xxxxx Fargo Bank, N.A., as
Securities Administrator for Deutsche Bank National Trust Company, as Trustee,
in trust for registered Holders of the Class M Certificates of the ABFC 2004-HE1
Trust, ABFC Asset-Backed Certificates, Series 2004-HE1" and which must be an
Eligible Account. Amounts on deposit in the Class M Reserve Account shall not be
invested. The Class M Reserve Account shall not be an asset of any REMIC formed
under this Agreement.
"Class M Yield Maintenance Agreement": The interest rate cap
agreement between the Securities Administrator, on behalf of the Trust, and the
Class M Yield Maintenance Agreement Provider substantially in the form attached
hereto as Exhibit N. The Class M Yield Maintenance Agreement shall not be an
asset of any REMIC formed under this Agreement.
"Class M Yield Maintenance Agreement Payment": On each
Distribution Date through the Distribution Date in June 2006, the amount equal
to the product of (a) the excess of the lesser of (i) One-Month LIBOR and (ii)
the applicable ceiling rate for such Distribution Date over the applicable
strike rate for such Distribution Date, each as set forth on the schedule
attached to the confirmation to the Class M Yield Maintenance Agreement for such
Distribution Date, (b) the product of the cap notional amount and the scale
factor, both as set forth on the schedule attached to the confirmation to the
Class M Yield Maintenance Agreement for such Distribution Date and (c) a
fraction, the numerator of which is the actual number of days elapsed since the
previous Distribution Date (or the Closing Date, in the case of the first
Distribution Date) to but excluding the current Distribution Date and the
denominator of which is 360.
"Class M Yield Maintenance Agreement Provider": Swiss Re
Financial Products Corporation and any successor thereto.
"Class M-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.600% per annum, and (ii) following
the Optional Termination Date, 0.900% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-1 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 78.60% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class
M-1 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof, in each case
for such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.150% per annum, and (ii) following
the Optional Termination Date, 1.725% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-2 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 87.00% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-2 Realized Loss Amortization Amount": As to the Class
M-2 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii) hereof, in each
case for such Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.350% per annum, and (ii) following
the Optional Termination Date, 2.250% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-3 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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) 89.10% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-3 Realized Loss Amortization Amount": As to the Class
M-3 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (x) hereof, in each case
for such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.700% per annum, and (ii) following
the Optional Termination Date, 2.550% per annum.
"Class M-4 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-4 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-4 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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 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)
91.10% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Pool Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Cut-off Date Aggregate Principal
Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class
M-4 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii) hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.850% per annum, and (ii) following
the Optional Termination Date, 2.775% per annum.
"Class M-5 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-5 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-5 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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
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 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) 93.10% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class
M-5 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi) hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 3.500% per annum, and (ii) following
the Optional Termination Date, 5.250% per annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-6 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-6 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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
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 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 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) 95.10% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class
M-6 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix) hereof, in each
case for such Distribution Date.
"Class M-7 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 3.500% per annum, and (ii) following
the Optional Termination Date, 5.250% per annum.
"Class M-7 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-7 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-7 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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
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 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 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 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) 95.70% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-7 Realized Loss Amortization Amount": As to the Class
M-7 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-7 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxii) hereof, in each
case for such Distribution Date.
"Class M-8 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 3.500% per annum, and (ii) following
the Optional Termination Date, 5.250% per annum.
"Class M-8 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-8 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-8 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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
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 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 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 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 Certificate Principal Balance of the Class M-8
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 97.10% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-8 Realized Loss Amortization Amount": As to the Class
M-8 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-8 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxv) hereof, in each
case for such Distribution Date.
"Class M-9 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 3.500% per annum, and (ii) following
the Optional Termination Date, 5.250% per annum.
"Class M-9 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-9 Certificate Margin and (b) the Maximum Rate Cap.
"Class M-9 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal 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 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
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 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 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 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), (ix) the Certificate Principal Balance of the Class M-8
Certificates (after taking into account the payment of the Class M-8 Principal
Distribution Amount on such Distribution Date) and (x) the Certificate Principal
Balance of the Class M-9 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 98.30% and (ii) the Pool
Balance as of the last day of the related Collection Period and (B) the Pool
Balance as of the last day of the related Collection Period minus the product of
0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-9 Realized Loss Amortization Amount": As to the Class
M-9 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-9 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxviii) hereof, in each
case for such Distribution Date.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the Securities Administrator on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class R Certificate": The Class R Certificate executed by the
Securities Administrator on behalf of the Trust, and authenticated and delivered
by the Certificate Registrar, substantially in the form annexed hereto as
Exhibit C-3 and evidencing the ownership of the Residual Interest in each of
REMIC 1 and REMIC 2. The Class R Certificate represents the ownership of the
Class R-1 Interest and the Class R-2 Interest.
"Class R-1 Interest": The uncertificated residual interest in
REMIC 1.
"Class R-2 Interest": The uncertificated residual interest in
REMIC 2.
"Closing Date": August 26, 2004.
"Code": The Internal Revenue Code of 1986, as it may be amended
from time to time.
"Collection Accounts": The separate accounts created and
maintained by each of the Servicers pursuant to the applicable Servicing
Agreement.
"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar month preceding the month in which
such Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
"Combined Loan-to-Value Ratio": For any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the sum of (i)
the Principal Balance of the Mortgage Loan at origination and (ii) the principal
balance of the senior mortgage loan, if any, on the date of origination of the
Mortgage Loan and the denominator of which is the Value of the related Mortgaged
Property.
"Compensating Interest": With respect to any Prepayment Period
and Servicer, an amount equal to the lesser of (a) its aggregate Servicing Fee
received in the related Collection Period and (b) the aggregate of the
Prepayment Interest Shortfalls on the Mortgage Loans serviced by such Servicer
resulting from Principal Prepayments on the Mortgage Loans during the related
Prepayment Period.
"Condemnation Proceeds": All awards or settlements in respect of
a taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Consulting Agreement": The Consulting Agreement, dated as of
August 26, 2004, between The Murrayhill Company, as Credit Risk Manager, and the
Depositor.
"Corporate Trust Office": With respect to the Trustee, 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, Attention:
Trust Administration - BA04H1 or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Depositor,
the Securities Administrator and the Master Servicer. With respect to the
Securities Administrator, the principal corporate trust office of the Securities
Administrator at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at (i) for certificate transfer
purposes, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx, 00000-0000, Attention: Client Manager-ABFC, Series 2004-HE1 and (ii)
for all other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Client Manager-ABFC, Series 2004-HE1 or at such other address as the
Securities Administrator may designate from time to time by notice to the
Certificateholders, the Depositor, the Trustee and the Master Servicer.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:
Corresponding REMIC 1 Classes Corresponding REMIC 2 Classes
LT1A1 Class A-1 Certificates
LT1A2 Class A-2 Certificates
LT1A3 Class A-3 Certificates
LT1M1 Class M-1 Certificates
LT1M2 Class M-2 Certificates
LT1M3 Class M-3 Certificates
LT1M4 Class M-4 Certificates
LT1M5 Class M-5 Certificates
LT1M6 Class M-6 Certificates
LT1M7 Class M-7 Certificates
LT1M8 Class M-8 Certificates
LT1M9 Class M-9 Certificates
"Credit Risk Manager": The Murrayhill Company, a Colorado
corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any Distribution
Date, 0.0160% per annum.
"Credit Risk Management Agreements": Each of (i) the Credit Risk
Management Agreement, dated as of August 26, 2004, between the Credit Risk
Manager and HomEq and (ii) the Credit Risk Management Agreement, dated as of
August 26, 2004, between the Credit Risk Manager and Xxxxx Fargo Bank, N.A., as
a Servicer.
"Custodial Agreement": Initially, each of (i) the Custodial
Agreement, dated August 26, 2004, by and among the Trustee, the Depositor, Xxxxx
Fargo Bank, N.A., as servicer, the Master Servicer and Xxxxx Fargo Bank, N.A.,
not individually, but solely as Custodian and (ii) the Custodial Agreement,
dated August 26, 2004, by and among the Trustee, the Depositor, Fremont, as
servicer, HomEq, as servicer, the Master Servicer and Deutsche Bank National
Trust Company, not individually, but solely as Custodian, and thereafter any
custodial agreement entered in to pursuant to Section 8.16.
"Custodian": Initially, Xxxxx Fargo Bank, N.A. (with respect to
the Xxxxx Fargo Mortgage Loans) and Deutsche Bank National Trust Company (with
respect to the Fremont Mortgage Loans) and thereafter the Custodian or
Custodians, if any, hereafter appointed by the Trustee pursuant to Section 8.16.
Any Custodian may (but need not) be the Trustee or the Securities Administrator
or any Person directly or indirectly controlling or controlled by or under
common control of either of them. Neither the Depositor nor any Person directly
or indirectly controlling or controlled by or under common control with the
Depositor may be appointed Custodian.
"Customary Servicing Procedures": With respect to a Servicer,
procedures (including collection procedures) that such Servicer customarily
employs and exercises in servicing and administering mortgage loans for its own
account and which are in accordance with accepted mortgage servicing practices
of prudent lending institutions servicing mortgage loans of the same type as the
Mortgage Loans in the jurisdictions in which the related Mortgaged Properties
are located.
"Cut-off Date": August 1, 2004.
"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 after
application of funds received or advanced on or before such date (or as of the
applicable date of substitution with respect to an Eligible Substitute Mortgage
Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
"Depositor": Asset Backed Funding Corporation, 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 Exchange Act. 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.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the
Securities Administrator based upon an Opinion of Counsel provided by nationally
recognized counsel to the Securities Administrator that the holding of an
ownership interest in the Class R 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 the Class R Certificate to such Person. A corporation will
not be treated as an instrumentality of the United States or of any state or
political subdivision thereof if all of its activities are subject to tax and a
majority of its board of directors is not selected by a governmental unit. The
term "United States," "state" and "international organization" shall have the
meanings set forth in Section 7701 of the Code.
"Distribution Account": The account or accounts created and
maintained by the Securities Administrator pursuant to Section 3.07, which shall
be entitled "Distribution Account, Xxxxx Fargo Bank, N.A., as Securities
Administrator under the Pooling and Servicing Agreement dated as of August 1,
2004 among Asset Backed Funding Corporation, as Depositor, Xxxxx Fargo Bank,
N.A., as Securities Administrator and Master Servicer, and Deutsche Bank
National Trust Company, as Trustee, in trust for registered Holders of ABFC
2004-HE1 Trust, ABFC Asset-Backed Certificates, Series 2004-HE1," and which must
be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in September 2004.
"Distribution Date Statement": As defined in Section 4.06(a)
hereof.
"Document Transfer Event": The 60th day following the day on
which either (i) Xxxxx Fargo Bank, N.A. is no longer the Servicer of any of the
Xxxxx Fargo Mortgage Loans or (ii) the senior, unsecured long-term debt rating
of Xxxxx Fargo & Company is less than "BBB-" by Fitch Ratings.
"Due Date": With respect to each Mortgage Loan and any
Distribution Date, the day of the calendar month in which such Distribution Date
occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive of
any grace period.
"Eligible Account": Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1" by S&P and "P-1" by Xxxxx'x (or comparable ratings if S&P and
Xxxxx'x are not the Rating Agencies) by each of the Rating Agencies at the time
any amounts are held on deposit therein, (ii) an account or accounts the
deposits in which are fully insured by the FDIC, (iii) a trust account or
accounts maintained with the trust department of a federal or state chartered
depository institution, national banking association or trust company acting in
its fiduciary capacity or (iv) an account otherwise acceptable to each Rating
Agency without reduction or withdrawal of their then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the Securities
Administrator, the Trustee and the NIMS Insurer. Eligible Accounts may bear
interest.
"Eligible 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 Securities Administrator, the NIMS Insurer, the Trustee or any of their
respective Affiliates or for which an Affiliate of the Securities Administrator
serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Securities Administrator or
its agents acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, such depository institution or
trust company or its ultimate parent has a short-term uninsured debt
rating in one of the two highest available rating categories of S&P and
Xxxxx'x and provided that each such investment has an original maturity of
no more than 365 days and (B) any other demand or time deposit or deposit
which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal) rated
"A" or higher by S&P and "A2" or higher by Xxxxx'x, provided, however,
that collateral transferred pursuant to such repurchase obligation must be
of the type described in clause (i) above and must (A) be valued daily at
current market prices plus accrued interest or (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred by the
Securities Administrator in exchange for such collateral and (C) be
delivered to the Securities Administrator or, if the Securities
Administrator is supplying the collateral, an agent for the Securities
Administrator, in such a manner as to accomplish perfection of a security
interest in the collateral by possession of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 (including funds managed or advised by the Securities
Administrator or affiliates thereof) that, if rated by each Rating Agency,
are rated in its highest rating category (if so rated by such Rating
Agency); and
(vii) if previously confirmed in writing to the Securities
Administrator and consented to by the NIMS Insurer, 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 an
eligible investment of funds backing securities having ratings equivalent
to its highest initial rating of the Senior 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.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted
for a Defective Mortgage Loan pursuant to the terms of this Agreement which
must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of the
outstanding principal balance of the Defective Mortgage Loan as of the Due Date
in the calendar month during which the substitution occurs, (ii) have a Mortgage
Interest Rate not less than the Mortgage Interest Rate of the Defective Mortgage
Loan and not more than 1% (in the case of a Defective Mortgage Loan that is a
Fremont Mortgage Loan) or 2% (in the case of a Defective Mortgage Loan that is a
Xxxxx Fargo Mortgage Loan) in excess of the Mortgage Interest Rate of such
Defective Mortgage Loan, (iii) have a remaining term to maturity not greater
than (and not more than one year less than) that of the Defective Mortgage Loan,
(iv) be of the same type as the Defective Mortgage Loan, (v) have a Prepayment
Charge at least equal in amount and duration of that of the Defective Mortgage
Loan and (vi) conform to each representation and warranty applicable to the
Defective Mortgage Loan set forth in Sections 3.01 and 3.02 of the Xxxxx Fargo
Sale and Servicing Agreement, Section 9 of the Fremont Sale Agreements or
Section 3.01 of the Mortgage Loan Purchase Agreement, as the case may be. In the
event that one or more mortgage loans are substituted for one or more Defective
Mortgage Loans, the amounts described in clause (i) hereof shall be determined
on the basis of aggregate principal balance, the Mortgage Interest Rates
described in clause (ii) hereof shall be determined on the basis of weighted
average Mortgage Interest Rates, the terms described in clause (iii) hereof
shall be determined on the basis of weighted average remaining term to maturity
and the representations and warranties described in clause (vi) hereof must be
satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as
the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class CE, Class P and
Class R Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.08.
"Estate in Real Property": A fee simple estate in a parcel of
real property.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": The sum of (i) the related Servicing Fee Rate
and (ii) the Credit Risk Manager Fee Rate.
"Extra Principal Distribution Amount": As of any Distribution
Date, the lesser of (x) the Monthly Excess Interest Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Form 10-K": As defined in Section 3.23(a) hereof.
"Fremont": Fremont Investment & Loan.
"Fremont Mortgage Loans": The Mortgage Loans purchased by the
Seller pursuant to the Fremont Sale Agreements or any Eligible Substitute
Mortgage Loan substituted for a Fremont Mortgage Loan.
"Fremont Sale Agreement": Either (i) the Mortgage Loan Purchase
and Warranties Agreement, dated June 1, 2004, between the Seller, as purchaser,
and Fremont, as seller, or (ii) the Mortgage Loan Purchase and Warranties
Agreement, dated July 1, 2004, between the Seller, as purchaser, and Fremont, as
seller.
"Fremont Servicing Agreement": Either (i) the Interim Servicing
Agreement, dated as of June 1, 2004, between Bank of America, N.A. and Fremont,
or (ii) the Interim Servicing Agreement, dated as of July 1, 2004, between Bank
of America, N.A. and Fremont, each as amended by the Assignment, Assumption and
Recognition Agreement, dated August 26, 2004, among Bank of America, N.A., the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
Fremont.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1
and REMIC 2 consisting of (a) the Prepayment Charges, any Originator Prepayment
Charge Payment Amounts, any Servicer Prepayment Charge Payment Amounts, proceeds
thereof in the Master Servicer Custodial Account or Distribution Account and the
right of the Class P Certificateholders to receive such Prepayment Charges,
Originator Prepayment Charge Payment Amounts and Servicer Prepayment Charge
Payment Amounts, (b) the right of the Offered Certificates to receive Cap
Carryover Amounts, (c) each Yield Maintenance Agreement, the Reserve Accounts
and the beneficial interest of the Class CE Certificates with respect thereto
and (d) the obligation of the Class CE Certificates to pay Cap Carryover
Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"HomEq": HomEq Servicing Corporation.
"HomEq Servicing Agreement": The Servicing Rights Purchase and
Servicing Agreement, dated as of August 1, 2004, between Bank of America, N.A.
and HomEq.
"Indenture": An indenture relating to the issuance of net
interest margin notes secured by the Class CE Certificates and the Class P
Certificates, which may or may not be guaranteed by the NIMS Insurer.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, the Master
Servicer, any Servicer and their respective Affiliates, (ii) does not have any
direct financial interest in or any material indirect financial interest in the
Depositor, the Master Servicer or any Servicer or any Affiliate thereof, and
(iii) is not connected with the Depositor, the Master Servicer, any Servicer or
any Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Master
Servicer, any 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, the Master Servicer, any Servicer or any Affiliate thereof, as the
case may be.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class CE, Class P or Class R Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Overcollateralization Amount": $7,313,227.77.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy, primary mortgage insurance policy or other insurance policy covering a
Mortgage Loan, to the extent such proceeds are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the applicable Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and the Offered Certificates, the period from and including the preceding
Distribution Date, or in the case of the first Distribution Date, from the
Closing Date, through and including the day prior to the current Distribution
Date.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class CE, Class P and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and
any Interest Carry Forward Amount for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Certificate
Interest Rate for the actual number of days elapsed on the basis of a 360-day
year since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates
and any Distribution Date, the ratio (expressed as a decimal carried to six
places) of the Accrued Certificate Interest for such Class to the sum of the
Accrued Certificate Interest for all Classes, in each case with respect to such
Distribution Date, without regard to Relief Act Interest Shortfalls.
"Interest Remittance Amount": As of any Distribution Date, the
sum, without duplication, of (i) all interest due and collected or advanced with
respect to the related Collection Period on the Mortgage Loans received by the
Servicers on or prior to the Determination Date for such Distribution Date (less
the applicable Servicing Fee, amounts available for reimbursement of Advances,
Servicing Advances and expenses pursuant to the applicable Servicing Agreement,
amounts reimbursable or payable to the Master Servicer pursuant to this
Agreement, including, without limitation, Sections 3.09 or 3.20 and amounts
reimbursable or payable to the Securities Administrator or Trustee pursuant to
this Agreement, including, without limitation, Sections 8.05 and 9.01(c)), (ii)
all Compensating Interest paid by the Servicers for such Distribution Date with
respect to such Mortgage Loans, (iii) the portion of any payment in connection
with any Principal Prepayment (other than any Prepayment Interest Excess),
substitution, Purchase Price, Termination Price, Insurance Proceeds or Net
Liquidation Proceeds relating to interest with respect to such Mortgage Loans
received during the related Prepayment Period and (iv) the portion of any
Reimbursement Amount relating to such Mortgage Loans received during the related
Prepayment Period.
"LIBOR Business Day": Any day on which banks in London, England
and The City of New York are open and conducting transactions in foreign
currency and exchange.
"LIBOR Determination Date": With respect to the Offered
Certificates, (i) for the first Distribution Date, the second LIBOR Business Day
preceding the Closing Date and (ii) for each subsequent Distribution Date, the
second LIBOR Business Day prior to the immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the applicable Servicer has determined, in
accordance with Customary Servicing Procedures, as of the end of the related
Prepayment Period, that all Liquidation Proceeds, Condemnation Proceeds and
Insurance Proceeds which it expects to recover with respect to the liquidation
of the Mortgage Loan or disposition of the related REO Property have been
recovered.
"Liquidation Proceeds": The amount (other than amounts received
in respect of the rental of any REO Property prior to REO Disposition) received
by the applicable Servicer in connection with (i) the taking of all or a part of
a Mortgaged Property by exercise of the power of eminent domain or condemnation
or (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.
"Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC Pass-Through Rates for REMIC 1 Regular Interest
LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1
Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest
LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest
LT1M8, REMIC 1 Regular Interest LT1M9 and REMIC 1 Regular Interest LT1ZZ, (i)
with the rate on each such REMIC Regular Interest (other than REMIC 1 Regular
Interest LT1ZZ) subject to a cap equal to the Pass-Through Rate of its
Corresponding Class (taking into account in determining any such Pass-through
Rate the imposition of the Pool Cap as described in footnotes (1) through (13)
to the table in the Preliminary Statement relating to the Certificates) for the
purposes of this calculation and (ii) with the rate on REMIC 1 Regular Interest
LT1ZZ subject to a cap of zero for the purpose of this calculation; provided,
however, that for this purpose, calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with respect to each such REMIC Regular
Interest (other than REMIC 1 Regular Interest LT1ZZ) shall be multiplied by a
fraction, the numerator of which is the actual number of days in the Interest
Accrual Period and the denominator of which is 30.
"Master Servicer": Xxxxx Fargo Bank, N.A., a national banking
association, or any successor master servicer appointed as herein provided, in
its capacity as Master Servicer hereunder.
"Master Servicer Custodial Account": The account or accounts
created and maintained by the Master Servicer pursuant to Section 3.07, which
shall be entitled "Master Servicer Custodial Account, Xxxxx Fargo Bank, N.A., as
Master Servicer under the Pooling and Servicing Agreement dated as of August 1,
2004 among Asset Backed Funding Corporation, as Depositor, Xxxxx Fargo Bank,
N.A., as Securities Administrator and Master Servicer, and Deutsche Bank
National Trust Company, as Trustee, in trust for registered Holders of ABFC
2004-HE1 Trust, ABFC Asset-Backed Certificates, Series 2004-HE1," and which must
be an Eligible Account.
"Master Servicer Custodial Account Reinvestment Income": For each
Distribution Date, all income and gains net of any losses realized since the
preceding Distribution Date from Eligible Investments of funds in the Master
Servicer Custodial Account.
"Master Servicing Officer": With respect to the Master Servicer,
any officer of the Master Servicer involved in, or responsible for, the
administration and master servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished to the Securities Administrator and the
Trustee by the Master Servicer, as such list may from time to time be amended.
"Master Servicing Transfer Costs": All reasonable costs and
expenses incurred by the Trustee in connection with the transfer of master
servicing from a predecessor master servicer, including, without limitation, any
costs or expenses associated with the complete transfer of all master servicing
data and the completion, correction or manipulation of such master servicing
data as may be required by the Trustee to correct any errors or insufficiencies
in the master servicing data or otherwise to enable the Trustee or other
successor master servicer to master service the Mortgage Loans properly and
effectively.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8 and REMIC
1 Regular Interest LT1M9 each subject to a cap equal to the Pass-Through Rate of
the related Corresponding Class for the purpose of this calculation; provided,
however, that for this purpose, calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with respect to Uncertificated Accrued
Interest on REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2,
REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular
Interest LT1M7, REMIC 1 Regular Interest LT1M8 and REMIC 1 Regular Interest
LT1M9 shall be multiplied by a fraction, the numerator of which is the actual
number of days in the Interest Accrual Period and the denominator of which is
30.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate thereunder.
"Maximum Rate Cap": With respect to any Distribution Date and for
the Offered Certificates, a per annum rate, adjusted by multiplying such rate by
a fraction equal to 30 over the actual number of days in the related Interest
Accrual Period, equal to the average of the Net Maximum Mortgage Interest Rates
for the Adjustable-Rate Mortgage Loans and the Net Mortgage Interest Rates for
the Fixed-Rate Mortgage Loans, weighted on the basis of the Principal Balances
of the Mortgage Loans as of the first day of the related Collection Period.
"MERS": The Mortgage Electronic Registration Systems, Inc.
"MERS Mortgage Loan": Any MOM Mortgage Loan or any other Mortgage
Loan as to which MERS or its designee is (or is intended to be) the mortgagee of
record and as to which a MIN has been assigned.
"MIN": A MERS Mortgage Identification Number assigned to a
Mortgage Loan registered under MERS.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Interest Rate thereunder.
"MOM": A Mortgage Loan where the related Mortgage names MERS or
its designee as the original mortgagee thereof, as to which a MIN has been
assigned, and which Mortgage has not been assigned to any other person.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates.
"Monthly Excess Interest Amount": With respect to each
Distribution Date, the amount, if any, by which the Interest Remittance Amount
for such Distribution Date exceeds the aggregate amount distributed on such
Distribution Date pursuant to paragraphs (i) through (xii) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.23(a) hereof.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the applicable Servicer pursuant to the applicable
Servicing Agreement; 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., and its successors,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut-off Date shall be the rate set forth in
the Mortgage Loan Schedule as the Mortgage Interest Rate in effect immediately
following the Cut-off Date and (B) as of any date of determination thereafter
shall be the rate as adjusted on the most recent Adjustment Date, to equal the
sum, rounded as provided in the Mortgage Note, of the Index, determined as set
forth in the related Mortgage Note, plus the related Gross Margin subject to the
limitations set forth in the related Mortgage Note. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to
the Trustee pursuant to Section 2.01, Section 2.03(c) or Section 2.03(d) as from
time to time held as a part of the Trust Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, dated as of August 1, 2004, regarding the transfer of
the Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on
such date attached hereto as Exhibit D. The Mortgage Loan Schedule shall set
forth the following information with respect to each Mortgage Loan:
(1) the Mortgage Loan identifying number;
(2) the state and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged Property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the current principal and interest payment of the Mortgage Loan as of
the Cut-off Date;
(14) the contractual interest paid to date of the Mortgage Loan;
(15) the Combined Loan-to-Value Ratio at origination and as of the Cut-off
Date;
(16) a code indicating the loan performance status of the Mortgage Loan as
of the Cut-off Date;
(17) a code indicating the Index that is associated with such Mortgage
Loan;
(18) the Gross Margin;
(19) the Periodic Rate Cap;
(20) the Minimum Mortgage Interest Rate;
(21) the Maximum Mortgage Interest Rate;
(22) a code indicating whether the Mortgage Loan has a Prepayment Charge
and the type of Prepayment Charge and the term;
(23) the first Adjustment Date immediately following the Cut-off Date;
(24) the rate adjustment frequency;
(25) the payment adjustment frequency;
(26) the purpose of the Mortgage Loan;
(27) a code indicating the initial Servicer;
(28) a code indicating whether the Mortgage Loan has a lender-paid primary
mortgage insurance policy; and
(29) a code indicating whether the Mortgage Loan is a second lien.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current Principal Balance
of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time in accordance with the
provisions of this Agreement and a copy of such amended Mortgage Loan Schedule
shall be furnished by the Master Servicer to the NIMS Insurer. With respect to
any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the
applicable date of substitution.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"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 unreimbursed Advances,
unreimbursed Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Maximum Mortgage Interest Rate": With respect to any
Adjustable-Rate Mortgage Loan, the applicable Maximum Mortgage Interest Rate
minus the Expense Fee Rate.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan,
the Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee
Rate.
"NIMS Insurer": Any insurer that is guaranteeing certain payments
under notes secured by collateral which includes all or a portion of the Class
CE, Class P and Class R Certificates.
"Notional Amount": With respect to the Class CE Certificates, an
amount equal to the aggregate principal balance of the REMIC 1 Regular
Interests.
"Offered Certificates": The Class A-1, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates.
"Officers' Certificate": A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a vice president
(however denominated), a principal, the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the Seller
or the Depositor, as applicable.
"One-Month LIBOR": With respect to each Interest Accrual Period,
the rate determined by the Securities Administrator on the related LIBOR
Determination Date on the basis of the offered rate for one-month United States
dollar deposits, as such rate appears on the Telerate Page 3750, as of 11:00
a.m. (London time) on such LIBOR Determination Date. If no such quotations are
available on an LIBOR Determination Date, One-Month LIBOR for the related
Interest Accrual Period will be established by the Securities Administrator as
follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple
of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Securities
Administrator after consultation with the Depositor and the NIMS
Insurer, as of 11:00 A.M., New York City time, on such date for loans in
U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal
Balance of the Offered Certificates; and
(iii) If no such quotations can be obtained, One-Month LIBOR for
the related Interest Accrual Period shall be One-Month LIBOR for the
prior Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Master
Servicer except that any opinion of counsel relating to (a) the qualification of
any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the NIMS Insurer, if there is a NIMS Insurer, or if there is no NIMS Insurer,
the Majority Class CE Certificateholders or, if such holder is the Seller or is
affiliated with the Seller or there is no Majority Class CE Certificateholders,
the Master Servicer, or if the Master Servicer fails to act, HomEq, may opt to
terminate the Mortgage Pool pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to
each Class of Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class in the Preliminary Statement,
except with respect to (i) the Class P and Class R Certificates, which have an
Original Class Certificate Principal Balance of zero and (ii) the Class CE
Certificates, which, solely for REMIC purposes, have an Original Class
Certificate Principal Balance equal to the Initial Overcollateralization Amount.
"Originator": Either Fremont or Xxxxx Fargo Bank, N.A., as the
case may be.
"Originator Prepayment Charge Payment Amount": The amount payable
by (i) Xxxxx Fargo Bank, N.A. pursuant to Section 4.21(b) of the Xxxxx Fargo
Sale and Servicing Agreement or (ii) Fremont pursuant to Section 9.03 of either
Fremont Sale Agreement, in respect of certain Prepayment Charges that are not
collected from the applicable Mortgagor.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the related
Collection Period over (y) the aggregate Certificate Principal Balance of all
Classes of Offered Certificates (after taking into account all distributions of
principal on such Distribution Date and the increase of any Certificate
Principal Balance as a result of Subsequent Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of all
Classes of Offered Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates on such Distribution
Date, over (ii) the Targeted Overcollateralization Amount for such Distribution
Date. With respect to any Distribution Date on which a Trigger Event is in
effect, the Overcollateralization Release Amount will be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate, the
Class A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class M-1
Pass-Through Rate, the Class M-2 Pass-Through Rate, the Class M-3 Pass-Through
Rate, the Class M-4 Pass-Through Rate, the Class M-5 Pass-Through Rate, the
Class M-6 Pass-Through Rate, the Class M-7 Pass-Through Rate, the Class M-8
Pass-Through Rate and the Class M-9 Pass-Through Rate; and in the case of any
Regular Interest, the Pass-Through Rate set forth in the definition thereof.
With respect to the Class CE Certificates 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 (N) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest
LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1
Regular Interest LT1M8, REMIC 1 Regular Interest LT1M9 and REMIC 1 Regular
Interest LT1ZZ. For purposes of calculating the Pass-Through Rate for the Class
CE Certificates, the numerator is equal to the sum of the following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M1;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M2;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M3;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M4;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M5;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M6 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M6;
(K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M7 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M7;
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M8 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M8;
(M) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1M9 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1M9; and
(N) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section
5.05.
"Percentage Interest": With respect to any Certificate (other
than a Class CE, Class P or Class R Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal Balance,
as the case may be, represented by such Certificate and the denominator of which
is the Original Class Certificate Principal Balance of the related Class. With
respect to a Class CE or Class P Certificate, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Certificate;
provided, however, that the sum of all such percentages for each such Class
totals 100%. With respect to the Class R Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Transferee": Any transferee of a Class R Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Class R Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"Person": Any individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": As of any Distribution Date and the Offered
Certificates, a per annum rate, adjusted by multiplying such rate by a fraction
equal to 30 over the actual number of days in the related Interest Accrual
Period, equal to the Weighted Average Net Mortgage Interest Rate for the
Mortgage Loans.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by a Servicer from a Mortgagor
in connection with any voluntary Principal Prepayment in full pursuant to the
terms of the related Mortgage Note as from time to time held as a part of the
Trust Fund, the Prepayment Charges so held being identified in the Mortgage Loan
Schedule (other than any Originator Prepayment Charge Payment Amount or Servicer
Prepayment Charge Payment Amount).
"Prepayment Interest Excess": With respect to any Distribution
Date, for each Fremont Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period beginning
on the first day of the calendar month in which such Distribution Date occurs
through the Determination Date of the calendar month in which such Distribution
Date occurs, an amount equal to interest (to the extent received) at the
applicable Mortgage Interest Rate (net of the Servicing Fee Rate) on the amount
of such Principal Prepayment for the number of days commencing on the first day
of the calendar month in which such Distribution Date occurs and ending on the
date on which such prepayment is so applied.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring in the prior
calendar month that was applied by the applicable Servicer to reduce the
outstanding Principal Balance of such Mortgage Loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the date on which the Principal
Prepayment is applied and ending on the last day of the calendar month in which
applied.
"Prepayment Period": With respect to any Distribution Date and
(i) a Fremont Mortgage Loan (other than with respect to voluntary Principal
Prepayments in part), the period commencing on the day after the Determination
Date in the calendar month preceding the calendar month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, on
August 1, 2004) and ending on the Determination Date in the calendar month in
which such Distribution Date occurs and (ii) a Xxxxx Fargo Mortgage Loan or a
Fremont Mortgage Loan (with respect to voluntary Principal Prepayments in part
only), the calendar month preceding the month in which such Distribution Date
occurs.
"Principal Balance": As to any Mortgage Loan and any day, other
than a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance,
minus the sum of (i) all collections and other amounts credited against the
principal balance of any such Mortgage Loan, (ii) the principal portion of
Advances, (iii) any Deficient Valuation and (iv) any principal reduction
resulting from a Servicer Modification. For purposes of this definition, a
Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to
the Principal Balance of the related Mortgage Loan as of the final recovery of
related Liquidation Proceeds and a Principal Balance of zero thereafter. As to
any REO Property and any day, the Principal Balance of the related Mortgage Loan
immediately prior to such Mortgage Loan becoming REO Property minus any REO
Principal Amortization received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date, the
sum of (i) the Principal Remittance Amount minus the Overcollateralization
Release Amount, if any, and (ii) the Extra Principal Distribution Amount, if
any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, to the extent of funds available therefor, the sum (less amounts available
for reimbursement of Advances and Servicing Advances and expenses pursuant to
the applicable Servicing Agreement, amounts reimbursable or payable to the
Master Servicer pursuant to this Agreement, including, without limitation,
Sections 3.09 or 3.20 and amounts reimbursable or payable to the Securities
Administrator or Trustee pursuant to this Agreement, including, without
limitation, Sections 8.05 and Section 9.01(c)) of: (i) each payment of principal
on a Mortgage Loan due during the related Collection Period and received by the
Servicers on or prior to the related Determination Date, and any Advances with
respect thereto, (ii) all full and partial Principal Prepayments received by the
applicable Servicer during the related Prepayment Period, (iii) Insurance
Proceeds, Net Liquidation Proceeds and Subsequent Recoveries allocable to
principal actually collected by the applicable Servicer during the related
Prepayment Period, (iv) with respect to Defective Mortgage Loans repurchased
with respect to such Prepayment Period, the portion of the Purchase Price
allocable to principal, (v) any Substitution Adjustment Amounts paid during the
related Prepayment Period and (vi) on the Distribution Date on which the Trust
is to be terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal.
"Private Certificates": Any of the Class CE, Class P and Class R
Certificates.
"Prospectus Supplement": That certain Prospectus Supplement dated
August 24, 2004 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, an amount equal to the sum of (i) 100% of the Principal Balance thereof
as of the date of purchase (or such other price as provided in Section 10.01),
(ii) in the case of a Mortgage Loan, accrued interest on such Principal Balance
at the applicable Mortgage Interest Rate in effect from time to time from the
Due Date as to which interest was last covered by a payment by the Mortgagor or
an Advance by the applicable Servicer, which payment or Advance had as of the
date of purchase been distributed pursuant to Section 4.01, through the end of
the calendar month in which the purchase is to be effected, (iii) any
unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan or REO Property, and (iv) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Master Servicer, the Securities
Administrator or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.
"Rating Agency or Rating Agencies": Xxxxx'x and S&P, or their
respective successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee, the
Securities Administrator and the Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1
Realized Loss Amortization Amount, the Class M-2 Realized Loss Amortization
Amount, the Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized
Loss Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the
Class M-6 Realized Loss Amortization Amount, the Class M-7 Realized Loss
Amortization Amount, the Class M-8 Realized Loss Amortization Amount and the
Class M-9 Realized Loss Amortization Amount.
"Record Date": With respect to all of the Certificates (other
than the Private Certificates), the Business Day immediately preceding such
Distribution Date; provided, however, that if any such Certificate becomes a
Definitive Certificate, the Record Date for such Certificate shall be the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs. With respect to the Private Certificates, the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Securities Administrator, (iii) whose
quotations appear on the Telerate Page 3750 on the relevant LIBOR Determination
Date and (iv) which have been designated as such by the Securities
Administrator; provided, however, that if fewer than two of such banks provide a
One-Month LIBOR rate, then any leading banks selected by the Securities
Administrator which are engaged in transactions in United States dollar deposits
in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates and the
Class CE Certificates.
"Reimbursement Amount": With respect to any Mortgage Loan, any
costs or damages incurred by the Trust in connection with a breach of (i)
Fremont's representations and warranties set forth in Sections 9.02(g), (tt),
(uu), (vv), (nnn) or Section 13.02 of the Fremont Sale Agreement and (ii) Xxxxx
Fargo Bank, N.A.'s representation and warranties regarding predatory and abusive
lending laws set forth in the Xxxxx Fargo Sale and Servicing Agreement.
"Related Documents": With respect to any Mortgage Loan, the
related Mortgage Notes and other related documents.
"Relief Act": The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act or similar
state laws, the amount by which (i) interest collectible on such Mortgage Loan
during such Collection Period is less than (ii) one month's interest on the
Principal Balance of such Mortgage Loan at the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the application of the Relief Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum 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 LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount payable
from or loss attributable to the Mortgage Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6,
REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8, REMIC 1 Regular
Interest LT1M9 and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the
Targeted Overcollateralization 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 Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest
LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8 and REMIC 1 Regular
Interest LT1M9, 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 (a) the product of (i) 50% of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular
Interest LT1M8, and REMIC 1 Regular Interest LT1M9 and the denominator of which
is the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular Interest LT1M5,
REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular
Interest LT1M8, REMIC 1 Regular Interest LT1M9 and REMIC 1 Regular Interest
LT1ZZ.
"REMIC 1 Regular Interest LT1AA": 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 LT1AA
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 LT1A1": 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 LT1A1
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 LT1A2": 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 LT1A2
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 asset forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1A3": 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 LT1A3
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 asset forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M1": 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 LT1M1
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 LT1M2": 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 LT1M2
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 LT1M3": 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 LT1M3
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 LT1M4": 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 LT1M4
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 LT1M5": 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 LT1M5
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 LT1M6": 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 LT1M6
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 LT1M7": 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 LT1M7
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 LT1M8": 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 LT1M8
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 LT1M9": 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 LT1M9
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 LT1XX": 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 LT1XX
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 LT1ZZ": 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 LT1ZZ
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 LT1AA,
REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1 Regular
Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7,
REMIC 1 Regular Interest LT1M8, REMIC 1 Regular Interest LT1M9, REMIC 1 Regular
Interest LT1XX and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount
payable or loss attributable from the Mortgage Loans, which shall be allocated
to REMIC 1 Regular Interest LT1XX.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": Any REMIC 1 Regular Interest or any of
the Certificates (other than the Class P and Class R Certificates).
"Remittance Date": With respect to any Distribution Date, the
18th day of the calendar month in which such Distribution Date occurs or, if
such 18th day is not a Business Day, the Business Day immediately following such
18th day.
"Remittance Report": A report prepared by the Master Servicer,
based on information provided by the Servicers, and delivered to the Securities
Administrator and the NIMS Insurer pursuant to Section 4.07, containing the
information attached hereto as Exhibit M.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust.
"REO Principal Amortization": With respect to any REO Property,
for any calendar month, the aggregate of all amounts received in respect of such
REO Property during such calendar month, whether in the form of rental income,
sale proceeds (including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts payable or reimbursable to a
Servicer pursuant to the applicable Servicing Agreement for unpaid Servicing
Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances
and Advances in respect of such REO Property or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by a Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure.
"Request for Release": A release signed by a Servicing Officer,
in the form of Exhibit E attached hereto.
"Reserve Account": Either of the Class A Reserve Account or the
Class M Reserve Account.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Xxxxxx Xxx eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Interest": The sole Class of "residual interests" in
each REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee or
the Securities Administrator, any officer assigned to the Corporate Trust
Department of the Trustee or the Securities Administrator, as applicable,
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee or
Securities Administrator customarily performing functions similar to those
performed by any of the above designated officers and in each case having direct
responsibility for the administration of this Agreement.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., and its successors, and if such company shall for any reason no
longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other "nationally recognized statistical rating
organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Securities Administrator": Xxxxx Fargo Bank, N.A., and its
successors-in-interest and, if a successor securities administrator is appointed
hereunder, such successor, as securities administrator.
"Seller": Bank of America, N.A., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates": The Class A-1, Class A-2 and Class A-3
Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinated Certificates and (ii) the
Overcollateralization Amount, in each case before taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
"Senior Principal Distribution Amount": With respect to any
Distribution Date (i) before the Stepdown Date or as to which a Trigger Event is
in effect, the lesser of (a) the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date and (b) the
Principal Distribution Amount and (ii) on or after the Stepdown Date and as long
as a Trigger Event is not in effect, the excess of (a) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date over (b) the lesser of (x) the product of (1) 68.00% and (2)
the aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Collection Period and (y) the amount by which the aggregate Principal
Balance of the Mortgage Loans as of the last day of the related Collection
Period exceeds the product of (1) 0.50% and (2) the Cut-off Date Aggregate
Principal Balance.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 32.00%.
"Servicer": With respect to the Fremont Mortgage Loans, either of
Fremont or HomEq and with respect to the Xxxxx Fargo Mortgage Loans, Xxxxx Fargo
Bank, N.A., as the context requires, each in their capacity as a servicer of
such related Mortgage Loans, or any successor servicer appointed as herein
provided.
"Servicer Modification": A modification to the terms of a
Mortgage Loan, in accordance with the terms of the applicable Servicing
Agreement.
"Servicer Prepayment Charge Payment Amount": The amount payable
by a Servicer in respect of any waived Prepayment Charges pursuant to the
applicable Servicing Agreement, which amount shall be equal to the difference
between the amount of Prepayment Charge due by a Mortgagor before any waiver and
the actual amount of the Prepayment Charge that was paid by the Mortgagor.
"Servicing Advances": With respect to each Servicer, the meaning
given to such term in the applicable Servicing Agreement.
"Servicing Agreement": Any of the Fremont Servicing Agreement,
the HomEq Servicing Agreement or the Xxxxx Fargo Sale and Servicing Agreement.
"Servicing Fee": With respect to each Servicer, as defined in the
applicable Servicing Agreement.
"Servicing Fee Rate": With respect to each Mortgage Loan, as
defined in the applicable Servicing Agreement.
"Servicing Officer": With respect to each Servicer, as defined in
the related Servicing Agreement.
"Similar Law": As defined in Section 5.02(d) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stepdown Date": The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates is reduced to zero and (ii) the later to occur of (x) the
Distribution Date in September 2007 and (y) the Distribution Date on which the
Senior Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class CE and
Class R Certificates.
"Subsequent Recovery": Any amount (net of reimbursable expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.
"Substitution Adjustment Amount": As defined in Section 2.03(c)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 0.85% of the Cut-off Date Aggregate
Principal Balance and (y) on and after the Stepdown Date, (i) if a Trigger Event
has not occurred, the greater of (A) 1.70% of the Pool Balance as of the last
day of the related Collection Period and (B) 0.50% of the Cut-off Date Aggregate
Principal Balance and (ii) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant
to Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the two REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Moneyline Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i)
the three-month rolling average of 60+ Day Delinquent Loans equals or exceeds
40.00% of the Senior Enhancement Percentage or (ii) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Collection Period (reduced by the aggregate amount of Subsequent
Recoveries received since the Cut-off Date through the last day of the related
Collection Period) divided by the Cut-off Date Aggregate Principal Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ----------
September 2007 through August 2008 2.75%
September 2008 through August 2009 4.25%
September 2009 through August 2010 5.50%
September 2010 and thereafter 5.75%
"Trust": ABFC 2004-HE1 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which two REMIC elections are to be made, such
entire Trust Fund consisting of: (i) such Mortgage Loans as from time to time
are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the Depositor's rights under the Servicing Agreements,
the Fremont Sale Agreements, the Xxxxx Fargo Sale and Servicing Agreement and
the Mortgage Loan Purchase Agreement (including any security interest created
thereby), (v) the Securities Administrator's rights under each Yield Maintenance
Agreement and (vi) the Master Servicer Custodial Account, the Distribution
Account and the Reserve Accounts 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.
"Trustee": Deutsche Bank National Trust Company, a national
banking association, or any successor Trustee appointed as herein provided.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular
Interests based on their respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each REMIC 1 Regular Interest shall equal
the principal amount set forth in the Preliminary Statement hereto as its
initial uncertificated balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC 1 Regular Interest shall be reduced by all
distributions of principal made on such REMIC 1 Regular Interest on such
Distribution Date pursuant to Section 4.08 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.08(b). The Uncertificated Balance of REMIC 1
Regular Interest LT1ZZ shall be increased by interest deferrals as provided in
Section 4.08(a)(i). The Uncertificated Balance of each REMIC 1 Regular Interest
shall never be less than zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC
1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular
Interest LT1A2, REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M1,
REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6,
REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8, REMIC 1 Regular
Interest LT1M9, REMIC 1 Regular Interest LT1ZZ and REMIC 1 Regular Interest
LT1XX, the Weighted Average Net Mortgage Rate of the Mortgage Loans.
"United States Person" or "U.S. Person": (i) A citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership for United States federal income tax
purposes organized in or under the laws of the United States or any state
thereof or the District of Columbia (unless, in the case of a partnership,
Treasury Regulations provide otherwise), (iii) an estate the income of which is
includible in gross income for United States tax purposes, regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
Regulations, certain Trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be a U.S. Person; provided, that for purposes
of the definition of a "Permitted Transferee," a U.S. Person shall not include
any person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person.
"Unpaid Realized Loss Amount": For any of the Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9 Certificates and as to any Distribution Date, the excess of (x) the
aggregate Applied Realized Loss Amounts allocated to such Class for all prior
Distribution Dates over (y) the sum of (a) the cumulative amount of any
Subsequent Recoveries allocated to such Class and (b) the aggregate Realized
Loss Amortization Amounts with respect to such Class for all prior Distribution
Dates.
"Value": With respect to any Mortgaged Property, the lesser of:
(i) an amount determined by an appraisal done at origination of the Mortgage
Loan and (ii) the purchase price paid for the related Mortgaged Property by the
Mortgagor with the proceeds of the Mortgage Loan; provided, however, that in the
case of a refinanced Mortgage Loan, the value of the Mortgaged Property is based
solely upon clause (i) above.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of the Offered Certificates shall be 98%, and shall be allocated
among each such Class according to the fraction, expressed as a percentage, the
numerator of which is the aggregate Certificate Principal Balance of all the
Certificates of such Class then outstanding and the denominator of which is the
aggregate Certificate Principal Balance of all the Offered Certificates then
outstanding. The Voting Rights allocated to each such Class of Certificates
shall be allocated among all holders of each such Class in proportion to the
outstanding Certificate Principal Balance of such Certificates; provided,
however, that any Certificate registered in the name of the Master Servicer, the
Depositor, the Securities Administrator or the Trustee or any of their
respective affiliates shall not be included in the calculation of Voting Rights;
provided that only such Certificates as are known by a Responsible Officer of
the Securities Administrator to be so registered will be so excluded. 1% of all
the Voting Rights will be allocated to the Holders of each of the Class CE and
Class P Certificates. The Class R Certificates shall have no Voting Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based
on Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, expressed for each such Mortgage Loan as
an annual rate and calculated on the basis of twelve months consisting of 30
days each and a 360-day year.
"Xxxxx Fargo Mortgage Loans": The Mortgage Loans purchased by the
Seller pursuant to the Xxxxx Fargo Sale and Servicing Agreement or any Eligible
Substitute Mortgage Loan substituted for a Xxxxx Fargo Mortgage Loan.
"Xxxxx Fargo Sale and Servicing Agreement": The Seller's
Warranties and Servicing Agreement, dated as of May 1, 2004, between Bank of
America, N.A. and Xxxxx Fargo Bank, N.A. (successor by merger to Xxxxx Fargo
Home Mortgage, Inc.), as amended by the Assignment, Assumption and Recognition
Agreement, dated August 26, 2004, among Bank of America, N.A., the Depositor,
the Master Servicer, the Trustee and Xxxxx Fargo Bank, N.A.
"Written Order to Authenticate": A written order by which the
Depositor directs the Securities Administrator to execute, authenticate and
deliver the Certificates.
"Yield Maintenance Agreement": Either of the Class A Yield
Maintenance Agreement or the Class M Yield Maintenance Agreement.
"Yield Maintenance Agreement Payment": Either of the Class A
Yield Maintenance Agreement Payment or the Class M Yield Maintenance Agreement
Payment.
"Yield Maintenance Agreement Provider": Either of the Class A
Yield Maintenance Agreement Provider or the Class M Yield Maintenance Agreement
Provider.
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 Rights of the NIMS Insurer.
Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to the Indenture and (ii)
any series of notes issued pursuant to the Indenture remains outstanding or the
NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided, however, the NIMS Insurer shall not have any rights hereunder
(except pursuant to Section 11.01 in the case of clause (ii) below) during the
period of time, if any, that (i) the NIMS Insurer has not undertaken to
guarantee certain payments of notes issued pursuant to the Indenture or (ii) any
default has occurred and is continuing under the insurance policy issued by the
NIMS Insurer with respect to such notes.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse for the benefit of the
Certificateholders all the right, title and interest of the Depositor, including
any security interest therein for the benefit of the Depositor, in and to (i)
each Mortgage Loan identified on the Mortgage Loan Schedule, including the
related Cut-off Date Principal Balance, all interest accruing thereon after the
Cut-off Date and all collections in respect of interest and principal due after
the Cut-off Date; (ii) property which secured each such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
other assets included or to be included in the Trust Fund; (v) all proceeds of
any of the foregoing; (vi) the rights of the Depositor under the Consulting
Agreement; and (vii) the rights of the Depositor under the Fremont Sale
Agreements, the Fremont Servicing Agreements, the HomEq Servicing Agreement, the
Xxxxx Fargo Sale and Servicing Agreement and the Mortgage Loan Purchase
Agreement. Such assignment includes all interest and principal due to the
Depositor after the Cut-off Date with respect to the Mortgage Loans.
In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with the Trustee (or Custodians on behalf of
the Trustee) the following documents or instruments with respect to each
Mortgage Loan (a "Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed in blank or with respect to
any lost Mortgage Note, an original Lost Note Affidavit, together
with a copy of the related Mortgage Note;
(ii) with respect to the Fremont Mortgage Loans only, the original
Mortgage with evidence of recording thereon, and the original
recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original
submitted for recording;
(iii) except with respect to each MERS Mortgage Loan, an original
Assignment of Mortgage, in form and substance acceptable for
recording. The Mortgage shall be assigned in blank;
(iv) with respect to the Fremont Mortgage Loans only, an original copy
of any intervening assignment of Mortgage showing a complete
chain of assignments and for each Fremont Mortgage Loan that is a
MERS Mortgage Loan but is not a MOM Mortgage Loan, the original
assignment showing MERS or its designee as the assignee of the
Mortgage;
(v) with respect to the Fremont Mortgage Loans only, the original or
a certified copy of lender's title insurance policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
Following a Document Transfer Event, the Depositor shall, with
respect to each Xxxxx Fargo Mortgage Loan, deliver, or cause to be delivered, to
the Trustee (or applicable Custodian on behalf of the Trustee) within 60 days
copies (which may be in electronic form mutually agreed upon by the Depositor
and the Trustee (or applicable Custodian on behalf of the Trustee)) of the
following additional documents or instruments to the Mortgage File with respect
to each Xxxxx Fargo Mortgage Loan; provided, however, that originals of such
documents or instruments shall be delivered to the Trustee (or applicable
Custodian on behalf of the Trustee), if originals are required under the law in
which the related Mortgaged Property is located in order to exercise all
remedies available to the Trust under applicable law following default by the
related Mortgagor:
(i) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments and for each MERS
Mortgage Loan that is not a MOM Mortgage Loan, the original
assignment showing MERS or its designee as the assignee of the
Mortgage;
(ii) the original or a certified copy of lender's title insurance
policy; and
(iii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of attorney has been
submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of
attorney, as the case may be, certified to be a true and complete
copy of the original submitted for recording.
The Trustee (or Custodians on behalf of the Trustee) agrees to
execute and deliver to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
If any of the documents referred to above has as of the Closing
Date been submitted for recording but either (x) has not been returned from the
applicable public recording office or (y) has been lost or such public recording
office has retained the original of such document, the obligations of the
Depositor to deliver such documents shall be deemed to be satisfied upon (1)
delivery to the Trustee (or Custodians on behalf of the Trustee), no later than
the Closing Date, of a copy of each such 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 Custodians on behalf of the Trustee) promptly upon receipt thereof
of either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Depositor shall deliver or cause to be delivered to the Trustee (or Custodians
on behalf of the Trustee) promptly upon receipt thereof any other documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
With respect to any MERS Mortgage Loan, the Master Servicer shall
cause the applicable Servicer to take all actions as are necessary to cause the
Trust to be shown as the owner of the related Mortgage Loan on the records of
MERS for the purpose of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
Trustee (or Custodians on behalf of the Trustee). If the Seller does not cure
such defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The Depositor herewith delivers to the Trustee (or Custodians on
behalf of the Trustee), executed copies of the Fremont Sale Agreements, the
Fremont Servicing Agreements, the HomEq Servicing Agreement, the Xxxxx Fargo
Sale and Servicing Agreement and the Mortgage Loan Purchase Agreement.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt (or receipt by the Custodian
on its behalf) of, subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the next paragraph below, the documents required to be delivered
pursuant to Section 2.01 above and all other assets included in the definition
of "Trust Fund" and declares that it holds and will hold such documents and the
other documents delivered to it constituting a Mortgage File, and that it holds
or will hold all such assets and such other assets included in the definition of
"Trust Fund" in trust for the exclusive use and benefit of all present and
future Certificateholders.
The Trustee (or Custodians on behalf of the Trustee) agrees, for
the benefit of the Certificateholders, to review each Mortgage File within 60
days after the Closing Date (or, with respect to any document delivered after
the Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to certify
in substantially the form attached hereto as Exhibit F-1 that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such documents
described in Section 2.01(iv) or (vi)) required to be delivered to it pursuant
to this Agreement are in its possession, (ii) such documents have been reviewed
by it and have not been mutilated, damaged or torn and relate to such Mortgage
Loan and (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items
(1), (2), (10) and (22) of the Mortgage Loan Schedule accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee (or Custodians on behalf of the Trustee) is
under no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
Prior to the first anniversary date of this Agreement, the
Trustee (or Custodians on behalf of the Trustee) shall deliver to the Depositor,
the Master Servicer, the applicable Servicer, the Securities Administrator 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
(or Custodians on behalf of the Trustee) 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 (or Custodians on
behalf of the Trustee) shall so notify the Seller, the Depositor, the NIMS
Insurer, the Master Servicer and the Securities Administrator. In addition, upon
the discovery by the applicable Originator, the Seller, the Depositor, the NIMS
Insurer, the Custodians, the Trustee, the Securities Administrator or the Master
Servicer (or upon receipt by the Trustee or a Custodian of written notification
of such breach) of a breach of any of the representations and warranties made by
an Originator in the Fremont Sale Agreements or Xxxxx Fargo Sale and Servicing
Agreement or the Seller in the Mortgage Loan Purchase Agreement in respect of
any Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
The Securities Administrator is hereby directed to execute and
deliver, on behalf of the Trust, the Class A Yield Maintenance Agreement and
Class M Yield Maintenance Agreement.
Section 2.03 Repurchase or Substitution of Mortgage Loans by an
Originator or the Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by an Originator or the Seller of any representation or warranty
under the Fremont Sale Agreements, Xxxxx Fargo Sale and Servicing Agreement or
the Mortgage Loan Purchase Agreement, as applicable, in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan,
Prepayment Charge or the interest therein of the Certificateholders, the Trustee
shall promptly notify the applicable Originator or the Seller, as the case may
be, the Master Servicer, the applicable Servicer and the NIMS Insurer of such
defect, missing document or breach and request that, in the case of a defective
or missing document, the Seller cure such defect or deliver such missing
document within 120 days from the date the Seller was notified of such missing
document or defect or, in the case of a breach of a representation or warranty,
request the applicable Originator or the Seller, as applicable, cure such breach
within 90 days from the date the applicable Originator or the Seller, as the
case may be, was notified of such breach. If the Seller does not deliver such
missing document or cure such defect or if the applicable Originator or the
Seller, as the case may be, does not cure such breach in all material respects
during such period, the Trustee shall enforce the applicable Originator's or the
Seller's obligation, as the case may be, under the applicable Fremont Sale
Agreement, the Xxxxx Fargo Sale and Servicing Agreement or the Mortgage Loan
Purchase Agreement, as applicable, and cause the applicable Originator or the
Seller, as the case may be, to repurchase such Mortgage Loan from the Trust Fund
at the Purchase Price on or prior to the Determination Date following the
expiration of such period (subject to Section 2.03(d)). The Purchase Price for
the repurchased Mortgage Loan shall be deposited in the Master Servicer
Custodial Account, and the Trustee (or applicable Custodian on behalf of the
Trustee), upon receipt of written notice from the Master Servicer of such
deposit, shall release to the applicable Originator or the Seller, as
applicable, the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
applicable Originator or the Seller, as applicable, shall furnish to it and as
shall be necessary to vest in such Originator or the Seller, as the case may be,
any Mortgage Loan released pursuant hereto and the Trustee shall have no further
responsibility with regard to such Mortgage File. In lieu of repurchasing any
such Mortgage Loan as provided above, the applicable Originator or the Seller,
as the case may be, may cause such Mortgage Loan to be removed from the Trust
Fund (in which case it shall become a Defective Mortgage Loan) and substitute
one or more Eligible Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(c).
With respect to the representations and warranties set forth in
the Fremont Sale Agreements, the Xxxxx Fargo Sale and Servicing Agreement and
the Mortgage Loan Purchase Agreement that are made to the best of the applicable
Originator's or the Seller's knowledge, as the case may be, or as to which the
applicable Originator or the Seller, as the case may be, has no knowledge, if it
is discovered by the Depositor, the Master Servicer, the NIMS Insurer, the
Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, Prepayment Charge or
the interest therein of the Certificateholders then, notwithstanding the
applicable Originator's or the Seller's lack of knowledge with respect to the
substance of such representation and warranty being inaccurate at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the applicable representation or warranty.
It is understood and agreed that the representations and
warranties set forth in the Fremont Sale Agreements, the Xxxxx Fargo Sale and
Servicing Agreement and the Mortgage Loan Purchase Agreement shall survive
delivery of the Mortgage Files to the Trustee (or Custodians on behalf of the
Trustee) and the Closing Date and shall inure to the benefit of the
Certificateholders notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Originators
and the Seller set forth in this Section 2.03(a) to cure, substitute for or
repurchase a Mortgage Loan pursuant to the Fremont Sale Agreements, the Xxxxx
Fargo Sale and Servicing Agreement and the Mortgage Loan Purchase Agreement, as
applicable, and to pay the Reimbursement Amount constitute the sole remedies
available to the Certificateholders and to the Trustee on their behalf
respecting a breach of the representations and warranties contained in the
Fremont Sale Agreements, the Xxxxx Fargo Sale and Servicing Agreement and the
Mortgage Loan Purchase Agreement.
The representations and warranties of the Originators with
respect to the Mortgage Loans in the Fremont Sale Agreements and the Xxxxx Fargo
Sale and Servicing Agreement, which have been assigned to the Trustee hereunder,
were made as of the dates specified in the applicable Fremont Sale Agreement or
the Xxxxx Fargo Sale and Servicing Agreement, as the case may be. To the extent
that any fact, condition or event with respect to a Mortgage Loan constitutes a
breach of both (i) a representation or warranty of the applicable Originator
under the applicable Fremont Sale Agreement or the Xxxxx Fargo Sale and
Servicing Agreement, as the case may be, and (ii) a representation or warranty
of the Seller under the Mortgage Loan Purchase Agreement (other than Seller's
representations with respect to predatory and abusive lending laws in Section
3.01(k) and 3.01(t) of the Mortgage Loan Purchase Agreement), the only right or
remedy of the Trustee or of any Certificateholder shall be the Trustee's right
to enforce the obligations of the applicable Originator under any applicable
representation or warranty made by it. The Trustee acknowledges that the Seller
shall have no obligation or liability with respect to any breach of a
representation or warranty made by it with respect to the Mortgage Loans (except
as otherwise set forth in this paragraph) if the fact, condition or event
constituting such breach also constitutes a breach of a representation or
warranty made by an Originator in the applicable Fremont Sale Agreement or the
Xxxxx Fargo Sale and Servicing Agreement, as the case may be, without regard to
whether the applicable Originator fulfills its contractual obligations in
respect of such representation or warranty. In addition, the related Originator
shall be obligated to pay the Reimbursement Amount relating to such Mortgage
Loan, and, to the extent such Originator fails to do so, the Trustee shall be
entitled to enforce the Seller's obligation to pay such Reimbursement Amount.
(b) 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
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which an Originator or the Seller substitutes an
Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected
by such Originator or the Seller, as applicable, delivering to the Trustee (or
applicable Custodian on behalf of the Trustee) for such Eligible Substitute
Mortgage Loan or Loans, the documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate of the Seller providing that each such Eligible Substitute
Mortgage Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. The Trustee (or applicable Custodian on behalf of the Trustee)
shall acknowledge receipt for such Eligible Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Master Servicer, the applicable
Servicer and the NIMS Insurer, with respect to such Eligible 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 (or applicable Custodian on behalf of the
Trustee) shall deliver to the Master Servicer, the applicable Servicer and the
NIMS Insurer a certification substantially in the form of Exhibit F-2 hereto
with respect to such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the month of substitution are not part of
the Trust Fund and will be retained by applicable Originator or the Seller, as
the case may be. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Defective Mortgage Loan in the Collection Period or Prepayment Period, as
applicable, preceding the date of substitution and the Depositor, the applicable
Originator or the Seller, as the case may be, shall thereafter be entitled to
retain all amounts subsequently received in respect of such Defective Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders and the NIMS Insurer that such substitution has taken place,
shall amend the Mortgage Loan Schedule to reflect the removal of such Defective
Mortgage Loan from the terms of this Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee, the Master Servicer, the
Custodians and the NIMS Insurer. Upon such substitution, such Eligible
Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and
shall be subject in all respects to the terms of this Agreement and, in the case
of a substitution effected by an Originator or the Seller, the applicable
Fremont Sale Agreement, the Xxxxx Fargo Sale and Servicing Agreement or the
Mortgage Loan Purchase Agreement, as the case may be, including, in the case of
a substitution effected by an Originator or the Seller, all applicable
representations and warranties thereof included in the applicable Fremont Sale
Agreement, the Xxxxx Fargo Sale and Servicing Agreement or the Mortgage Loan
Purchase Agreement, as the case may be, as of the date of substitution.
For any month in which an Originator or the Seller substitutes
one or more Eligible Substitute Mortgage Loans for one or more Defective
Mortgage Loans, the Master Servicer will determine the amount (the "Substitution
Adjustment Amount"), if any, by which the aggregate Purchase Price of all such
Defective Mortgage Loans exceeds the aggregate, as to each such Eligible
Substitute Mortgage Loan, of the principal balance thereof as of the date of
substitution, together with one month's interest on such principal balance at
the applicable Net Mortgage Interest Rate. On the date of such substitution, an
Originator or the Seller, as the case may be, will deliver or cause to be
delivered to the Master Servicer for deposit in the Master Servicer Custodial
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee (or the applicable Custodian on behalf of the Trustee), upon receipt of
the related Eligible Substitute Mortgage Loan or Loans and notice by the Master
Servicer of such deposit, shall release to the applicable Originator or the
Seller, as the case may be, the related Mortgage File or Files and the Trustee
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as such Originator or the Seller, as the case may be,
shall deliver to it and as shall be necessary to vest therein any Defective
Mortgage Loan released pursuant hereto.
In addition, the related Originator or the Seller, as applicable,
shall obtain at its own expense and deliver to the Trustee and the NIMS Insurer
an Opinion of Counsel to the effect that such substitution will not cause (a)
any federal tax to be imposed on the Trust Fund, including without limitation,
any federal tax imposed on "prohibited transactions" under Section 860F(a)(l) of
the Code or on "contributions after the startup date" under Section 860G(d)(l)
of the Code, or (b) any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificate is outstanding. If such Opinion of Counsel cannot
be delivered, then such substitution may only be effected at such time as the
required Opinion of Counsel can be given.
(d) Upon discovery by the Seller, the Master Servicer, the NIMS
Insurer, the Securities Administrator, the Custodians or the Trustee that any
Mortgage Loan does not constitute a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, the party discovering such fact shall within two
Business Days give written notice thereof to the other parties. In connection
therewith, the related Originator or the Seller, as applicable, shall repurchase
or, subject to the limitations set forth in Section 2.03(c), substitute one or
more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 90
days of the earlier of discovery or receipt of such notice with respect to such
affected Mortgage Loan. In addition, upon discovery that a Mortgage Loan is
defective in a manner that would cause it to be a "defective obligation" within
the meaning of Treasury Regulations relating to REMICs, the related Originator
or the Seller, as the case may be, shall cure the defect or make the required
purchase or substitution no later than 90 days after the discovery of the
defect. Any such repurchase or substitution shall be made in the same manner as
set forth in Section 2.03(a). The Trustee (or applicable Custodian on behalf of
the Trustee) shall reconvey to the related Originator or the Seller, as the case
may be, the Mortgage Loan to be released pursuant hereto in the same manner, and
on the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty.
Section 2.04 [Reserved].
Section 2.05 Representations, Warranties and Covenants of the
Master Servicer.
The Master Servicer hereby represents, warrants and covenants to
the Trustee, for the benefit of each of the Trustee and the Certificateholders
and to the Depositor, the Securities Administrator and the NIMS Insurer that as
of the Closing Date or as of such date specifically provided herein:
(i) The Master Servicer is a national banking association duly
chartered and validly existing in good standing under the laws of the
United States of America and has all licenses necessary to carry on its
business as now being conducted. The Master Servicer has power and
authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Master Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized.
This Agreement, assuming due authorization, execution and delivery by the
other parties hereto, evidences the valid, binding and enforceable
obligation of the Master Servicer, subject to applicable law except as
enforceability may be limited by (A) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting
the enforcement of the rights of creditors and (B) general principles of
equity, whether enforcement is sought in a proceeding in equity or at law.
All requisite corporate action has been taken by the Master Servicer to
make this Agreement valid and binding upon the Master Servicer in
accordance with its terms;
(ii) No consent, approval, authorization or order is required for
the transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Master Servicer is required or, if required,
such consent, approval, authorization or order has been or will, prior to
the Closing Date, be obtained;
(iii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the articles
of incorporation or by-laws of the Master Servicer or result in the breach
of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Master Servicer or its property is subject;
(iv) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Master Servicer, threatened against
the Master Servicer which, either individually or in the aggregate, would
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Master Servicer, or in
any material impairment of the right or ability of the Master Servicer to
carry on its business substantially as now conducted or which would draw
into question the validity of this Agreement or the Mortgage Loans or of
any action taken or to be taken in connection with the obligations of the
Master Servicer contemplated herein, or which would materially impair the
ability of the Master Servicer to perform under the terms of this
Agreement;
(v) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement; and
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Master Servicer that,
either individually or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Master Servicer, or in any material impairment
of the right or ability of the Master Servicer to carry on its business
substantially as now conducted, or in any material liability on the part
of the Master Servicer, or that would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken in
connection with the obligations of the Master Servicer contemplated
herein, or that would be likely to impair materially the ability of the
Master Servicer to perform under the terms of this Agreement.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee (or Custodians on behalf of the Trustee) and shall
inure to the benefit of the Trustee, the Depositor, the Securities
Administrator, the NIMS Insurer and the Certificateholders. Upon discovery by
any of the Depositor, the Master Servicer, the NIMS Insurer, the Securities
Administrator or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders and to the Securities Administrator,
the Master Servicer and the NIMS Insurer as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and marketable title to each Mortgage Loan (insofar as
such title was conveyed to it by the Seller) subject to no prior lien,
claim, participation interest, mortgage, security interest, pledge, charge
or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf of
the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or defraud
any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own its assets and
conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement,
as the case may be; (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated
Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the Trustee acknowledges the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Securities Administrator, pursuant to the Written Order to Authenticate executed
by an officer of the Depositor, has executed, and the Certificate Registrar has
authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class CE, Class P and Class R Certificates) in
minimum dollar denominations or $25,000 and integral dollar multiples of $1 in
excess. The Class CE and Class P and Class R Certificates are issuable only in
minimum Percentage Interests of 10%. The Class R Certificate is issuable only as
a single certificate. The Trustee acknowledges the issuance of the
uncertificated REMIC 1 Regular Interests and declares that it hold such regular
interests as assets of REMIC 2. The Trustee acknowledges the obligation of the
Class CE Certificates to pay Cap Carryover Amounts, and declares that it hold
the same as assets of the Grantor Trust on behalf of the Holders of the Class
A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, respectively,
which shall be treated as beneficially owning the right to receive the Cap
Carryover Amounts from the Grantor Trust. In addition to the assets described in
the preceding sentence, the assets of the Grantor Trust shall also include (i)
Prepayment Charges, any Originator Prepayment Charge Payment Amounts, any
Servicer Prepayment Charge Payment Amounts and the beneficial interest of the
Class P Certificates with respect thereto and (ii) the Yield Maintenance
Agreements, the Reserve Accounts and the beneficial interest of the Class CE
Certificates with respect thereto, subject to the obligation to pay Cap
Carryover Amounts. The interests evidenced by the Certificates constitute the
entire beneficial ownership interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND MASTER SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer.
For and on behalf of the Certificateholders, the Master Servicer
shall supervise, monitor and oversee the obligations of the Servicers to service
and administer their respective Mortgage Loans in accordance with the terms of
the applicable Servicing Agreement and shall have full power and authority to do
any and all things which it may deem necessary or desirable in connection with
such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with this
Agreement, subject to the prior sentence, and with customary and usual standards
of practice of prudent mortgage loan master servicers. Furthermore, the Master
Servicer shall oversee and consult with each Servicer as necessary from time to
time to carry out the Master Servicer's obligations hereunder, shall receive,
review and evaluate all reports, information and other data provided to the
Master Servicer by each Servicer and shall cause each Servicer to perform and
observe the covenants, obligations and conditions to be performed or observed by
such Servicer under the applicable Servicing Agreement. The Master Servicer
shall independently and separately monitor each Servicer's servicing activities
with respect to each related Mortgage Loan, reconcile the results of such
monitoring with such information provided in the previous sentence on a monthly
basis and coordinate corrective adjustments to the Servicers' and Master
Servicer's records, and based on such reconciled and corrected information,
prepare the Remittance Reports and any other information and statements required
hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicers to the Master Servicer
Custodial Account pursuant to the applicable Servicing Agreements.
The relationship of the Master Servicer (and of any successor to
the Master Servicer as master servicer under this Agreement) to the Trustee and
the Securities Administrator under this Agreement is intended by the parties to
be that of an independent contractor and not that of a joint venturer, partner
or agent.
Section 3.02 Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to the
Trustee, the Securities Administrator and the Depositor the compliance by each
Servicer with its duties under the related Servicing Agreement. In the review of
each Servicer's activities, the Master Servicer may rely upon an officer's
certificate of such Servicer with regard to such Servicer's compliance with the
terms of its Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that a Servicer should be terminated in accordance with its
Servicing Agreement, or that a notice should be sent pursuant to such Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Depositor, the Securities Administrator and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of such
Servicer thereunder and, other than with respect to Xxxxx Fargo Bank, N.A. as
Servicer, act as successor Servicer of the related Mortgage Loans under the
applicable Servicing Agreement or enter into a new Servicing Agreement with a
successor Servicer selected by the Master Servicer; provided, however, if the
Master Servicer terminates the rights and obligations of Xxxxx Fargo Bank, N.A.,
as servicer under the Xxxxx Fargo Sale and Servicing Agreement, the Trustee
shall act as successor Servicer of the related Mortgage Loans under the Xxxxx
Fargo Sale and Servicing Agreement or shall enter into a new Servicing Agreement
as successor Servicer or with a different successor Servicer selected by the
Trustee; provided, further, it is understood and acknowledged by the parties
hereto that there will be a period of transition (not to exceed 90 days) before
the actual servicing functions can be fully transferred to such successor
Servicer. Such enforcement, including, without limitation, the legal prosecution
of claims, termination of 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, provided
that the Master Servicer shall not be required to prosecute or defend any legal
action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master
Servicer or the Trustee, as the case may be, related to any termination of a
Servicer, appointment of a successor Servicer or the transfer and assumption of
servicing by the Master Servicer or the Trustee with respect to any Servicing
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Servicer as a result of an event of default by such
Servicer and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with the related Servicing Agreement) are not fully
and timely reimbursed by the terminated Servicer, the Master Servicer or the
Trustee, as the case may be, shall be entitled to reimbursement of such costs
and expenses from the Certificate Account.
(d) The Master Servicer shall require each Servicer to comply
with the remittance requirements and other obligations set forth in the related
Servicing Agreement.
(e) If the Master Servicer or the Trustee acts as Servicer, it
will not assume liability for the representations and warranties of the
Servicer, if any, that it replaces.
Section 3.03 Maintenance of Primary Mortgage Insurance Policy;
Claims.
(a) The Master Servicer shall not take, or permit any Servicer
(to the extent such action is prohibited under the applicable Servicing
Agreement) to take, any action that would result in noncoverage under any
applicable primary mortgage insurance policy or lender-paid primary mortgage
insurance policy of any loss which, but for the actions of the Master Servicer
or such Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to cause each Servicer to pay all premiums and
charges in connection with any lender-paid primary mortgage insurance (to the
extent required under the related Servicing Agreement) and (if so obligated
pursuant to the terms of the related Servicing Agreement), to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of related Servicing Agreement. The Master
Servicer shall not, and shall not permit any Servicer (to the extent required
under the related Servicing Agreement) to, cancel or refuse to renew any such
primary mortgage insurance policy that is in effect at the date of the initial
issuance of the Mortgage Note and is required to be kept in force hereunder
except in accordance with the provisions of the related Servicing Agreement.
(b) The Master Servicer agrees to cause each Servicer (to the
extent required under the related Servicing Agreement) to present, on behalf of
the Trustee and the Certificateholders, claims to the insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Sections 3.07 and
3.08, any amounts collected by the Master Servicer or any Servicer under any
Primary Mortgage Insurance Policies shall be deposited in the Master Servicer
Custodial Account, subject to withdrawal pursuant to Sections 3.07 and 3.08.
Section 3.04 Rights of the Depositor, the Securities
Administrator and the Trustee in Respect of the Master Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer hereunder and in connection with any such defaulted obligation to
exercise the related rights of the Master Servicer hereunder; provided that the
Master Servicer shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Depositor or its designee. None of the
Securities Administrator, the Trustee or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer nor shall the Securities Administrator, the Trustee or the Depositor be
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
Section 3.05 Trustee to Act as Master Servicer.
If the Master Servicer shall for any reason no longer be the
Master Servicer hereunder (including by reason of an Event of Default), the
Trustee shall within 90 days of such time, assume, if it so elects, or shall
appoint a successor Master Servicer to assume, all of the rights and obligations
of the Master Servicer hereunder arising thereafter.
The predecessor Master Servicer shall, upon request of the
Trustee, but at the expense of the predecessor Master Servicer, deliver to the
assuming party all master servicing documents and records and an accounting of
amounts collected or held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of such substitute documentation and records to
the assuming party. The Trustee shall be entitled to be reimbursed from the
Master Servicer (or the Trust if the Master Servicer is unable to fulfill its
obligations hereunder) for all Master Servicing Transfer Costs.
Section 3.06 Collection Accounts.
The Master Servicer shall enforce the obligation of each Servicer
to establish and maintain a Collection Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within 48
hours (or as of such other time specified in the related Servicing Agreement) of
receipt all collections of principal and interest on any Mortgage Loan and with
respect to any REO Property received by a Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries,
Condemnation Proceeds, Prepayment Charges, Originator Prepayment Charge Payment
Amounts, Servicer Prepayment Charge Payment Amounts, Reimbursement Amounts and
Advances and payments of Compensating Interest made from the Servicer's own
funds (less servicing compensation as permitted by the applicable Servicing
Agreement) and all other amounts to be deposited in the applicable Collection
Account. The Master Servicer is hereby authorized to make withdrawals from and
deposits to the related Collection Account for purposes required or permitted by
this Agreement.
Section 3.07 Master Servicer Custodial Account, Distribution
Account and Reserve Accounts.
(a) The Master Servicer shall establish and maintain the Master
Servicer Custodial Account, which shall be an Eligible Account. The Master
Servicer shall, promptly upon receipt, deposit in the Master Servicer Custodial
Account and retain therein any amounts which are required to be deposited in the
Master Servicer Custodial Account by the Master Servicer.
(b) The Master Servicer shall deposit or cause to be deposited
into the Master Servicer Custodial Account, on the same Business Day of receipt
(except as otherwise specifically provided herein), the following payments and
collections remitted by the Servicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off Date)
and the following amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans, net
of the related Servicing Fee;
(iii) all Liquidation Proceeds and any Subsequent Recoveries;
(iv) (A) all Insurance Proceeds, other than Insurance Proceeds to be
(1) applied to the restoration or repair of the Mortgaged Property, (2)
released to the Mortgagor in accordance with Customary Servicing
Procedures or (3) required to be deposited to an Escrow Account pursuant
to the applicable Servicing Agreement and (B) any Insurance Proceeds
released from an Escrow Account;
(v) any amount required to be deposited by the Master Servicer
pursuant to Section 3.07(c) in connection with any losses on Eligible
Investments with respect to the Master Servicer Custodial Account;
(vi) any amounts relating to REO Property required to be remitted by
the applicable Servicer;
(vii) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with Customary
Servicing Procedures, the loan documents or applicable law;
(viii) Advances made by the applicable Servicer pursuant to the
related Servicing Agreement and any Compensating Interest paid by the
applicable Servicer pursuant to the related Servicing Agreement;
(ix) all Purchase Prices, Reimbursement Amounts and Substitution
Adjustment Amounts paid by a Servicer or an Originator, as the case may
be;
(x) all Prepayment Charges collected by the Servicers in connection
with the voluntary Principal Prepayment in full of any Mortgage Loan, all
Originator Prepayment Charge Payment Amounts paid by an Originator and all
Servicer Prepayment Charge Payment Amounts required to be paid by the
applicable Servicer pursuant to the related Servicing Agreement; and
(xi) any other amounts required to be deposited hereunder.
If the Master Servicer shall remit any amount not required to be
remitted, it may at any time withdraw such amount from the Master Servicer
Custodial Account, any provision herein to the contrary notwithstanding. All
funds required to be deposited in the Master Servicer Custodial Account shall be
held by the Master Servicer in trust for the Certificateholders until remitted
to the Securities Administrator in accordance with this Section 3.07(b) hereof
or withdrawn in accordance with Section 3.09.
(c) Each institution at which the Master Servicer Custodial
Account is maintained shall invest the funds therein as directed in writing by
the Master Servicer in Eligible Investments, which shall mature not later than
the Business Day next preceding the Distribution Date (except that if such
Eligible Investment is managed or advised by the Master Servicer or an Affiliate
thereof, then such Eligible Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior to
its maturity. All such Eligible Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. All Master Servicer
Custodial Account Reinvestment Income shall be for the benefit of the Master
Servicer as part of its master servicing compensation and shall be remitted to
the Master Servicer monthly as provided herein. The amount of any losses
realized in the Master Servicer Custodial Account in respect of any such
investments shall promptly be deposited by the Master Servicer in the Master
Servicer Custodial Account.
(d) The Securities Administrator will establish the Distribution
Account into which the Master Servicer will deposit, on or prior to 11:00 A.M.
New York time, on each Distribution Date (or if the Securities Administrator is
no longer the same Person as, or an Affiliate of, the Master Servicer, the
Business Day preceding each Distribution Date), all amounts on deposit in the
Master Servicer Custodial Account for distribution to Certificateholders. The
Distribution Account will be an Eligible Account.
(e) Each institution at which the Distribution Account is
maintained shall invest the funds therein as directed in writing by the
Securities Administrator in Eligible Investments, which shall mature not later
than the Business Day next preceding the Distribution Date (except that if such
Eligible Investment is managed or advised by the Securities Administrator or an
Affiliate thereof, then such Eligible Investment shall mature not later than
such Distribution Date) and, in each case, shall not be sold or disposed of
prior to its maturity. All such Eligible Investments shall be made in the name
of the Trustee, for the benefit of the Certificateholders. All income and gains
net of any losses realized since the preceding Distribution Date from Eligible
Investments of funds in the Distribution Account shall be for the benefit of the
Securities Administrator as additional compensation and the amount of any losses
realized in the Distribution Account in respect of any such Eligible Investments
shall promptly be deposited by the Securities Administrator in the Distribution
Account.
(f) The Master Servicer shall give notice to the Depositor, the
Trustee, the Securities Administrator, the Rating Agencies and the NIMS Insurer
of any proposed change of the location of the Master Servicer Custodial Account
maintained by the Master Servicer not later than 30 days after and not more than
45 days prior to any change thereof. The Securities Administrator shall give
notice to the Depositor, the Trustee, the Master Servicer, the Rating Agencies
and the NIMS Insurer of any proposed change of the location of the Distribution
Account maintained by the Securities Administrator not later than 30 days after
and not more than 45 days prior to any change thereof.
(g) Amounts in the Distribution Account shall be deemed to be
held on behalf of the related REMICs and the Grantor Trust in accordance with
the REMIC distributions set forth in Section 4.08.
(h) Any Prepayment Charges, Originator Prepayment Charge Payment
Amounts and Servicer Prepayment Charge Payment Amounts deposited pursuant to
Section 3.07(b)(x) shall not be assets of any REMIC created hereunder, but shall
be considered assets of the Grantor Trust held by the Trustee for the benefit of
the Class P Certificateholders.
(i) (i) The Securities Administrator shall establish and maintain
the Class A Reserve Account, held in trust for the benefit of the Holders of the
Class A Certificates. The Securities Administrator shall deposit in the Class A
Reserve Account on the date received by it, any Class A Yield Maintenance
Agreement Payment received from the Class A Yield Maintenance Agreement Provider
for the related Distribution Date. The Securities Administrator shall establish
and maintain the Class M Reserve Account, held in trust for the benefit of the
Holders of the Class M Certificates. The Securities Administrator shall deposit
in the Class M Reserve Account on the date received by it, any Class M Yield
Maintenance Agreement Payment received from the Class M Yield Maintenance
Agreement Provider for the related Distribution Date. On each Distribution Date,
the Securities Administrator shall withdraw from the Class A Reserve Account any
Class A Yield Maintenance Agreement Payment and shall withdraw from the Class M
Reserve Account any Class M Yield Maintenance Agreement Payment and apply them
in the following order of priority:
(A) concurrently, to the Class A Certificates from the
Class A Reserve Account, pro rata, based on the related unpaid
Cap Carryover Amount (after distributions to the Class A
Certificates pursuant to Section 4.02(b)(xxx) hereof);
(B) to the Class M Certificates from the Class M Reserve
Account, in each case only up to the Cap Amount for the related
Class, any remaining unpaid Cap Carryover Amounts for such
Classes for such Distribution Date (after distributions to the
Class M Certificates pursuant to Section 4.02(b)(xxx) hereof),
distributed sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9 Certificates, in that order;
(C) to the Class M Certificates, without regard to the Cap
Amount for any such Class, from the Class M Reserve Account, any
remaining unpaid Cap Carryover Amounts for such Classes for such
Distribution Date (after distributions to the Class M
Certificates pursuant to Section 4.02(b)(xxx) hereof and clause
(B) above) distributed sequentially, to the Class X-0, Xxxxx X-0,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9 Certificates, in that order, and
(D) to the Class CE Certificates, any remaining amount on
deposit in the Reserve Accounts.
(ii) The Securities Administrator shall account for each Reserve
Account as an asset of a grantor trust under subpart E, part I of
subchapter J of the Code and not an asset of any REMIC created pursuant to
this Agreement. The beneficial owner of each Reserve Account is the Class
CE Certificateholder. For all federal tax purposes, amounts transferred or
reimbursed by REMIC 2 to either Reserve Account shall be treated as
distributions by the Securities Administrator to the Class CE
Certificateholder.
(iii) Any Cap Carryover Amounts paid by the Securities
Administrator pursuant to this Section 3.07(i) to the Offered Certificates
shall be accounted for by the Securities Administrator as amounts paid
first to the Class CE Certificates and then to the respective Class or
Classes of Offered Certificates from the Grantor Trust. In addition, the
Securities Administrator shall account for the Offered Certificates'
rights to receive payments of Cap Carryover Amounts as rights in limited
recourse interest rate cap contracts written by the Class CE Certificates
in favor of each Class of Offered Certificates.
(iv) For federal tax return and information reporting, the right
of the Holders of the Offered Certificates to receive payments under the
Class A Yield Maintenance Agreement and Class M Yield Maintenance
Agreement in respect of any related Yield Maintenance Agreement Payments
shall be assigned a value of zero.
Section 3.08 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Servicing Agreement and by
the related Mortgage Note and not violative of current law, the Master Servicer
shall require each Servicer to establish and maintain one or more escrow
accounts (for each Servicer, collectively, the "Escrow Account") and deposit and
retain therein all collections from the Mortgagors (or advances by such
Servicer) for the payment of taxes, assessments, hazard insurance premiums or
comparable items for the account of the Mortgagors. Nothing herein shall require
the Master Servicer to compel a Servicer to establish an Escrow Account in
violation of applicable law.
Section 3.09 Permitted Withdrawals from the Master Servicer
Custodial Account and the Distribution Account.
(a) The Master Servicer may from time to time make withdrawals
from the Master Servicer Custodial Account for the following purposes:
(i) to pay to the Servicers (to the extent not previously
retained by them), the Servicing Fee to which they are entitled pursuant
to the Servicing Agreements and to pay itself any Master Servicer
Custodial Account Reinvestment Income;
(ii) to pay the Securities Administrator and the Trustee any
amounts due to the Securities Administrator and the Trustee under this
Agreement (including all amounts provided for under Section 8.05, other
than the amounts provided for in the first sentence of Section 8.05);
(iii) to reimburse the Servicers for unreimbursed Advances made
by them;
(iv) to reimburse the Servicers for any nonrecoverable Advance
previously made;
(v) to reimburse the Servicers for unreimbursed Servicing
Advances made by them;
(vi) to reimburse the Servicers for Insured Expenses from the
related Insurance Proceeds;
(vii) to pay to the purchaser, with respect to each Mortgage Loan
or REO Property that has been purchased pursuant to Sections 2.01 and
2.03, all amounts received thereon after the date of such purchase;
(viii) to reimburse itself, the Depositor or HomEq for losses,
liabilities and expenses incurred by any of them and reimbursable pursuant
to this Agreement, including but not limited to, Section 3.20;
(ix) to withdraw any amount deposited in the Master Servicer
Custodial Account and not required to be deposited therein; and
(x) to clear and terminate the Master Servicer Custodial Account
upon termination of the Agreement pursuant to Section 10.01.
(b) The Securities Administrator shall withdraw funds from the
Distribution Account for distributions to Certificateholders in the manner
specified in this Agreement.
Section 3.10 Maintenance of Hazard Insurance.
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the related Servicer under the applicable Servicing Agreement to
maintain or cause to be maintained fire and hazard insurance with extended
coverage customary in the area where the Mortgaged Property is located in
accordance with such Servicing Agreement. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set forth
in the applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.
Pursuant to Sections 3.07 and 3.08, any amounts collected by the
Master Servicer, or by any Servicer, under any insurance policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
applicable Servicing Agreement) shall be deposited into the Master Servicer
Custodial Account, subject to withdrawal pursuant to Section 3.09. Any cost
incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 3.09.
Section 3.11 Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in the
applicable Servicing Agreement) cause the related Servicer to prepare and
present on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in the
Master Servicer Custodial Account upon receipt, except that any amounts realized
that are to be applied to the repair or restoration of the related Mortgaged
Property as a condition precedent to the presentation of claims on the related
Mortgage Loan to the insurer under any applicable insurance policy need not be
so deposited (or remitted).
Section 3.12 Realization Upon Defaulted Mortgage Loans; REO
Property.
(a) The Master Servicer shall cause each Servicer (to the extent
required under the related Servicing Agreement) to foreclose upon or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans serviced by such Servicer as come into and continue in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments, all in accordance with the applicable Servicing Agreement.
(b) With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trust for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Master Servicer shall enforce the obligation of each Servicer, to the extent
provided in the applicable Servicing Agreement, to (i) cause the Trust to be
placed on the title to such REO Property and (ii) ensure that the title to such
REO Property references this Agreement. The Master Servicer shall, to the extent
provided in the applicable Servicing Agreement, cause the applicable Servicer to
sell any REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement and the related Servicing Agreement, as applicable.
Pursuant to its efforts to sell such REO Property, the Master Servicer shall
cause the applicable Servicer to protect and conserve such REO Property in the
manner and to the extent required by the applicable Servicing Agreement, subject
to the REMIC Provisions.
(c) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property in
the related Collection Account.
(d) The applicable Servicer, upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Advances and Servicing Advances as well as any unpaid Servicing Fees from
Liquidation Proceeds received in connection with the final disposition of such
REO Property; provided that any such unreimbursed Advances or Servicing Advances
as well as any unpaid Servicing Fees may be reimbursed or paid, as the case may
be, prior to final disposition, out of any net rental income or other net
amounts derived from such REO Property.
(e) The Liquidation Proceeds from the final disposition of the
REO Property, net of any payment to the applicable Servicer as provided above
shall be deposited in the related Collection Account on or prior to the
Determination Date in the month following receipt thereof and be remitted by
wire transfer in immediately available funds to the Master Servicer for deposit
into the Master Servicer Custodial Account.
(f) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall enforce the obligation of the related
Servicer to dispose of such REO Property before the end of the third taxable
year beginning after the year of its acquisition by the Trust Fund for purposes
of Section 860G(a)(8) of the Code unless such Servicer shall have applied for
and received an extension of such period from the Internal Revenue Service, in
which case the Trust Fund may continue to hold such REO Property for the period
of such extension. Notwithstanding any other provision of this Agreement, no REO
Property acquired by the Trust shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
Trust in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) subject either created REMIC hereunder to
the imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under Section 860G(c) of the Code or otherwise,
unless the Master Servicer or related Servicer, as applicable, has agreed to
indemnify and hold harmless the Trust with respect to the imposition of any such
taxes.
Section 3.13 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
To the extent provided in the applicable Servicing Agreement and
to the extent Mortgage Loans contain enforceable due on sale clauses, the Master
Servicer shall cause the related Servicer to enforce such clauses in accordance
with the applicable Servicing Agreement. If applicable law prohibits the
enforcement of a due on sale clause or such clause is otherwise not enforced in
accordance with the applicable Servicing Agreement, and, as a consequence, a
Mortgage Loan is assumed, the original Mortgagor may be released from liability
in accordance with the applicable Servicing Agreement.
Section 3.14 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer or the related Servicer of a notification that payment in
full will be escrowed in a manner customary for such purposes, the Master
Servicer or the related Servicer will immediately notify the Trustee (or, at the
direction of the Trustee, the related Custodian) by delivering, or causing to be
delivered, two copies (one of which will be returned to the Servicer with the
Mortgage File) of a Request for Release (which may be delivered in an electronic
format acceptable to the Trustee (or the related Custodian) and the Master
Servicer or the related Servicer). Upon receipt of such request, the Trustee or
the related Custodian, as applicable, shall within three Business Days release
the related Mortgage File to the Master Servicer or the related Servicer. The
Trustee shall at the Master Servicer's or the related Servicer's direction
execute and deliver to the Master Servicer or the related Servicer the request
for reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage, in each case provided by the
Master Servicer or the related Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. If the Mortgage has been recorded in
the name of MERS or its designee, the Master Servicer shall enforce the
applicable Servicer's obligation under the related Servicing Agreement take all
necessary action to reflect the release of the Mortgage on the records of MERS.
Expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Mortgagor.
(b) From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose
collection under any policy of flood insurance, any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee or the applicable Custodian, as
applicable, shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the applicable Custodian) of a Request for Release signed by a Master
Servicing Officer or a Servicing Officer, release the Mortgage File within three
Business Days to the Master Servicer or the related Servicer. Subject to the
further limitations set forth below, the Master Servicer or the applicable
Servicer shall cause the Mortgage Files so released to be returned to the
Trustee (or the applicable Custodian on behalf of the Trustee) when the need
therefor no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the applicable Collection Account, in which
case such Servicer shall deliver to the Trustee (or the applicable Custodian on
behalf of the Trustee) a Request for Release, signed by a Servicing Officer.
(c) If the Master Servicer or any related Servicer at any time
seeks to initiate a foreclosure proceeding in respect of any Mortgaged Property
as authorized by this Agreement or the applicable Servicing Agreement, the
Master Servicer or any related Servicer shall deliver or cause to be delivered
to the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity.
Section 3.15 Master Servicing Compensation.
Master servicing compensation in the form of Master Servicer
Custodial Account Reinvestment Income shall be remitted to the Master Servicer
pursuant to Section 3.09. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its master servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.
Section 3.16 Annual Statement as to Compliance.
(a) Beginning in 2005, the Master Servicer shall deliver to the
Securities Administrator (and the Securities Administrator will forward to the
Trustee, the NIMS Insurer and each Rating Agency), no later than March 10th of
each calendar year, an Officer's Certificate, signed by two officers of the
Master Servicer, stating, as to the signers thereof, that (a) a review of the
activities of the Master Servicer during the preceding calendar year and of the
performance of the Master Servicer under this Agreement or similar agreements
has been made under such officer's supervision, and (b) to the best of such
officer's knowledge, based on such review, the Master Servicer has fulfilled all
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.
(b) In addition, the Master Servicer shall enforce each
Servicer's obligation under the related Servicing Agreement to provide a similar
statement relating to compliance with the related Servicing Agreement.
Section 3.17 Annual Independent Certified Public Accountants'
Reports.
The Master Servicer shall enforce each Servicer's obligation to
provide the report required to be provided each year pursuant to Section 6.05 of
each Servicing Agreement.
Section 3.18 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
(a) The Master Servicer shall provide and cause each Servicer to provide in
accordance with the related Servicing Agreement to the Office of Thrift
Supervision and the FDIC and to comparable regulatory authorities supervising
Holders of Certificates and the examiners and supervisory agents of the Office
of Thrift Supervision, the FDIC and such other authorities, access to the
documentation required by applicable regulations of the Office of Thrift
Supervision and the FDIC with respect to the Mortgage Loans. Such access shall
be afforded without charge, but only upon reasonable and prior written request
and during normal business hours at the offices designated by the Master
Servicer and the related Servicer. In fulfilling such request for access, the
Master Servicer shall not be responsible to determine the sufficiency of any
information provided by such Servicer. Nothing in this Section 3.18 shall limit
the obligation of the Master Servicer and the related Servicer to observe any
applicable law and the failure of the Master Servicer or the related Servicer to
provide access as provided in this Section 3.18 as a result of such obligation
shall not constitute a breach of this Section 3.18.
(b) The Master Servicer shall afford the NIMS Insurer, upon
reasonable advance notice, during normal business hours, access to all records
maintained by the Master Servicer in respect of its rights and obligations
hereunder and access to officers of the Master Servicer responsible for such
obligations. Upon request, the Master Servicer shall furnish to the NIMS Insurer
its most recent publicly available financial statements and such other
information relating to its capacity to perform its obligations under this
Agreement.
Section 3.19 Duties of Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager shall
provide reports and recommendations as to loss mitigation activities concerning
Mortgage Loans that are past due, are in default, as to which there has been
commencement of foreclosure, as to which there has been forbearance in exercise
of remedies, as to which any obligor is the subject of bankruptcy, receivership,
or an arrangement of creditors, or which have become REO Properties. Such
reports and recommendations will be based upon information provided pursuant to
the Credit Risk Management Agreements. The Credit Risk Manager shall look solely
to the Servicers for all information and data (including loss and delinquency
information and data) and loan-level information and data relating to the
servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Rights of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.20 Liability of Master Servicer; Indemnification.
(a) Subject to clause (b) below, the Master Servicer (except the
Trustee if it is required to succeed the Master Servicer hereunder) indemnifies
and holds the Trustee, the Securities Administrator, the Depositor, the NIMS
Insurer and the Trust Fund harmless against any and all third party claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Securities Administrator, the Depositor, the NIMS Insurer and the Trust Fund may
sustain in any way related to the failure of the Master Servicer to perform its
duties in compliance with this Agreement. The Master Servicer shall immediately
notify the Trustee, the Securities Administrator, 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 Securities Administrator, the Depositor, the NIMS Insurer
and/or the Trust Fund in respect of such claim. The provisions of this Section
3.20 shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
(b) 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 or the Master Servicer or any
such Person against any breach of warranties or representations made by such
party herein, or against any specific liability imposed on the Master Servicer
for a breach of its duties under this Agreement, or against any liability which
would otherwise be imposed by reason of its respective willful misfeasance, bad
faith, fraud or negligence in the performance of its duties or by reasons of
negligent disregard of its respective obligations or duties hereunder.
The Depositor, the 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 appropriate Person with respect to any matters arising
hereunder. The Depositor, the NIMS Insurer and any director, officer, employee
or agent of the Depositor or the NIMS Insurer shall be indemnified and held
harmless by the Trust against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred in connection with any legal
action incurred by reason of its respective misfeasance, bad faith, fraud or
negligence, a breach of a representation or warranty made by such party
hereunder. In addition, the Master Servicer and any director, officer, employee
or agent of the Master Servicer will be indemnified by the Trust and will be
held harmless against any loss, liability or expense (not including expenses,
disbursements and advances incurred or made by the Master Servicer in the
ordinary course of the Master Servicer's performance in accordance with the
provisions hereof) the Master Servicer incurs arising out of or in connection
with the acceptance or administration of its obligations and duties hereunder,
other than any loss, liability or expense (i) that constitutes a specific
liability of the Master Servicer hereunder or (ii) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of the Master Servicer's
duties hereunder or by reason of reckless disregard of the Master Servicer's
obligations and duties hereunder. Further, HomEq shall be indemnified and held
harmless by the Trust from any loss, liability or expense incurred by HomEq in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or negligence in the performance of duties under the
HomEq Servicing Agreement or by reason of its reckless disregard of obligations
and duties thereunder, and HomEq shall be entitled to be reimbursed therefor
pursuant to Section 3.09 hereof upon presentation to the Master Servicer of
documentation of such expenses, costs and liabilities. 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 expose it to any expense or
liability; provided, however, that the Depositor or the Master Servicer may in
their discretion undertake any action related to their obligations hereunder
which they may deem necessary or desirable with respect to this Agreement and
the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Master Servicer pursuant to Section 6.03 or 7.01 with respect
to any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination).
Section 3.21 Limitation of Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors,
officers, employees or agents of the Credit Risk Manager, shall be under any
liability to the Depositor, the Master Servicer, the Securities Administrator,
the Trustee or the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, in
reliance upon information provided by the Servicers under the Credit Risk
Management Agreements or for errors in judgment; provided, however, that this
provision shall not protect the Credit Risk Manager or any such person against
liability that would otherwise be imposed by reason of willful malfeasance, bad
faith or negligence in its performance of its duties or by reason of reckless
disregard for its obligations and duties under this Agreement or the applicable
Credit Risk Management Agreements. The Credit Risk Manager and any director,
officer, employee or agent of the Credit Risk Manager may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder, and may rely in good faith upon
the accuracy of information furnished by the Servicers pursuant to the
applicable Credit Risk Management Agreements in the performance of its duties
thereunder and hereunder.
Section 3.22 No Personal Solicitation.
From and after the Closing Date, the Master Servicer agrees that
it will not take any action or knowingly permit or cause any action to be taken
by any of its agents and Affiliates, or by any independent contractors or
independent mortgage brokerage companies on the Master Servicer's behalf, to
personally, by telephone, mail or electronic mail, solicit the Mortgagor under
any Mortgage Loan for the purpose of refinancing such Mortgage Loan; provided,
however, it is understood and agreed that promotions undertaken by the Master
Servicer or any of its Affiliates which are directed to the general public at
large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section.
Section 3.23 Periodic Filings.
(a) The Securities Administrator, the Trustee and the Master
Servicer shall reasonably cooperate with the Depositor in connection with the
Trust's satisfying its reporting requirements under the Exchange Act. Without
limiting the generality of the foregoing, the Securities Administrator shall
prepare on behalf of the Trust any monthly Current Reports on Form 8-K (each, a
"Monthly Form 8-K") and Annual Reports on Form 10-K (each, a "Form 10-K")
customary for similar securities as required by the Exchange Act and the rules
and regulations of the Securities and Exchange Commission thereunder, and the
Securities Administrator shall sign (other than any Form 10-K) and file (via the
Securities and Exchange Commission's Electronic Data Gathering and Retrieval
System) such forms on behalf of the Trust. The Master Servicer shall sign any
Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Securities
Administrator within 15 days after each Distribution Date, including a copy of
the Distribution Date Statement for such Distribution Date as an exhibit
thereto. Prior to March 30th of each year (or such earlier date as may be
required by the Exchange Act and the rules and regulations of the Securities and
Exchange Commission), the Securities Administrator shall file a Form 10-K, in
substance as required by applicable law or applicable Securities and Exchange
Commission staff's interpretations. Such Form 10-K shall include as exhibits the
Master Servicer's and the Servicers' annual statement of compliance described
under Section 3.16 and the accountant's report referenced under Section 3.17, in
each case, to the extent they have been timely delivered to the Securities
Administrator. If they are not so timely delivered, the Securities Administrator
shall file an amended Form 10-K including such documents as exhibits reasonably
promptly after they are delivered to the Securities Administrator. The
Securities Administrator shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Securities Administrator's inability or failure to obtain any information not
resulting from its own negligence, willful misconduct or bad faith. The Form
10-K shall also include a certification in the form attached hereto as Exhibit O
(the "Certification"), which shall be signed by a senior officer of the Master
Servicer in charge of master servicing. The Master Servicer shall deliver the
Certification to the Securities Administrator three (3) Business Days prior to
the latest date on which the Form 10-K may be timely filed. The Securities
Administrator, the Depositor, the Trustee and the Master Servicer shall
reasonably cooperate to enable the Securities and Exchange Commission
requirements with respect to the Trust to be met in the event that the
Securities and Exchange Commission issues additional interpretive guidelines or
promulgates rules or regulations, or in the event of any other change of law
that would require reporting arrangements or the allocation of responsibilities
with respect thereto, as described in this Section 3.23, to be conducted or
allocated in a different manner.
(c) Prior to the latest date on which the Form 10-K may be timely
filed each year, the Securities Administrator shall sign and deliver to the
Master Servicer a certification (in the form attached hereto as Exhibit P) for
the benefit of the Master Servicer and its officers, directors and Affiliates
(provided, however, that the Securities Administrator shall not undertake an
analysis of the accountant's reports attached as an exhibit to the Form 10-K).
In addition, the Securities Administrator shall also indemnify and hold harmless
the Master Servicer and its officers, directors and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon any inaccuracy in the certification provided by the Securities
Administrator pursuant to this Section 3.23(c), any breach of the Securities
Administrator's obligations under this Section 3.23(c) or the Securities
Administrator's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer and its officers, directors
and Affiliates, then the Securities Administrator agrees that it shall
contribute to the amount paid or payable by the Master Servicer, its officers,
directors or Affiliates as a result of the losses, claims, damages or
liabilities of the Master Servicer, its officers, directors or Affiliates in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer and its officers, directors and Affiliates on the one hand and the
Securities Administrator on the other in connection with a breach of the
Securities Administrator's obligations under this Section 3.23(c) or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith.
(d) Upon any filing with the Securities and Exchange Commission,
the Securities Administrator shall promptly deliver to the Depositor a copy of
any such executed report, statement or information.
(e) The obligations set forth in paragraphs (a) through (d) of
this Section shall only apply with respect to periods for which the Securities
Administrator is obligated to file reports on Form 8-K or 10-K pursuant to
paragraph (b) of this Section. Upon request of the Depositor, the Securities
Administrator shall prepare, execute and file with the Securities and Exchange
Commission a Form 15 Suspension Notification with respect to the Trust, and
thereafter there shall be no further obligations under paragraphs (a) through
(d) of this Section commencing with the calendar year in which the Form 15 is
filed (other than the obligations to be performed in such calendar year that
relate back to the prior calendar year).
Section 3.24 Fidelity Bond; Errors and Omissions Insurance.
The Master Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad coverage
on all officers, employees or other persons involved in the performance of its
obligations as Master Servicer hereunder. These policies must insure the Master
Servicer against losses resulting from dishonest or fraudulent acts committed by
the Master Servicer's personnel, any employees of outside firms that provide
data processing services for the Master Servicer, and temporary contract
employees or student interns. No provision of this Section 3.24 requiring such
fidelity bond and errors and omissions insurance shall diminish or relieve the
Master Servicer from its duties and obligations as set forth in this Agreement.
The minimum coverage under any such bond and insurance policy shall be
consistent with what is customary for a prudent master servicer. In the event
that any such policy or bond ceases to be in effect, the Master Servicer shall
obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Securities Administrator shall
withdraw from the Distribution Account the Interest Remittance Amount and apply
it in the following order of priority (based upon the Mortgage Loan information
provided to it in the Remittance Report, upon which the Securities Administrator
may conclusively rely), and the calculations required to be made by the
Securities Administrator, to the extent available:
(i) to the Credit Risk Manager, the Credit Risk Manager Fee;
(ii) concurrently, to the Class A Certificates, pro rata, the
Accrued Certificate Interest thereon for such Distribution Date;
(iii) concurrently, to the Class A Certificates, pro rata, the
Interest Carry Forward Amount thereon for such Distribution Date;
(iv) to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(v) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vi) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vii) to the Class M-4 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class M-5 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ix) to the Class M-6 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(x) to the Class M-7 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xi) to the Class M-8 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xii) to the Class M-9 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and
(xiii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above
will be applied as described under Section 4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess
Cashflow Amounts.
(a) On each Distribution Date, the Securities Administrator shall
make the following distributions in the following order of priority (based upon
the Mortgage Loan information provided to it in the Remittance Report and the
calculations required to be made by the Securities Administrator), to the extent
of the Principal Distribution Amount:
(i) before the Stepdown Date or with respect to which a Trigger
Event is in effect, sequentially, as follows:
first, sequentially, to the Class A-1, Class A-2 and Class
A-3 Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero;
second, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
third, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
fifth, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
sixth, to the Class M-5 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
seventh, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
eighth, to the Class M-7 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
ninth, to the Class M-8 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
tenth, to the Class M-9 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
eleventh, any remaining Principal Distribution Amount will
be distributed as part of the Monthly Excess Cashflow Amount as
set forth in Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event
is not in effect:
first, sequentially, to the Class A-1, Class A-2 and Class
A-3 Certificates, in that order, up to the Senior Principal
Distribution Amount, until the Certificate Principal Balances
thereof have been reduced to zero;
second, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
third, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-6 Certificates, up to the Class
M-6 Principal Distribution Amount, until the Certificate
Principal Balance thereof has been reduced to zero;
eighth, to the Class M-7 Certificates, up to the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
ninth, to the Class M-8 Certificates, up to the Class M-8
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
tenth, to the Class M-9 Certificates, up to the Class M-9
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero; and
eleventh, any remaining Principal Distribution Amount will
be distributed as part of the Monthly Excess Cashflow Amount as
set forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to pay any remaining Accrued Certificate Interest for such
Distribution Date, pro rata, for the Class A Certificates;
(ii) to pay any Interest Carry Forward Amounts for such Distribution
Date, pro rata, for the Class A Certificates;
(iii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-1 Certificates;
(iv) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-1 Certificates;
(v) to pay the Class M-1 Realized Loss Amortization Amount for such
Distribution Date;
(vi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-2 Certificates;
(vii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-2 Certificates;
(viii) to pay the Class M-2 Realized Loss Amortization Amount for
such Distribution Date;
(ix) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-3 Certificates;
(x) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-3 Certificates;
(xi) to pay the Class M-3 Realized Loss Amortization Amount for such
Distribution Date;
(xii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-4 Certificates;
(xiii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-4 Certificates;
(xiv) to pay the Class M-4 Realized Loss Amortization Amount for
such Distribution Date;
(xv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-5 Certificates;
(xvi) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-5 Certificates;
(xvii) to pay the Class M-5 Realized Loss Amortization Amount for
such Distribution Date;
(xviii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-6 Certificates;
(xix) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-6 Certificates;
(xx) to pay the Class M-6 Realized Loss Amortization Amount for such
Distribution Date;
(xxi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-7 Certificates;
(xxii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-7 Certificates;
(xxiii) to pay the Class M-7 Realized Loss Amortization Amount for
such Distribution Date;
(xxiv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-8 Certificates;
(xxv) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-8 Certificates;
(xxvi) to pay the Class M-8 Realized Loss Amortization Amount for
such Distribution Date;
(xxvii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-9 Certificates;
(xxviii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-9 Certificates;
(xxix) to pay the Class M-9 Realized Loss Amortization Amount for
such Distribution Date;
(xxx) first, to the Class A-1, Class A-2 and Class A-3 Certificates,
pro rata, and then sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, any Cap Carryover Amount for each such Class;
and
(xxxi) to the Class CE Certificates, up to the Class CE
Distributable Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the
Holder of the Class R Certificate in respect of the Class R-1 Interest, any
remaining amount in the Distribution Account on such date after the application
pursuant to Sections 4.01, 4.02(a) and 4.02(b)(i)-(xxxi).
(c) On each Distribution Date, the Securities Administrator shall
withdraw any amounts then on deposit in the Distribution Account that represent
Prepayment Charges collected by the Servicers in connection with the Principal
Prepayment in full of any of the Mortgage Loans, any Originator Prepayment
Charge Payment Amounts or Servicer Prepayment Charge Payment Amounts and shall
distribute such amounts to the Holders of the Class P Certificates. Such amounts
shall be treated as having been distributed to the Holders of the Class P
Certificates from the Grantor Trust.
(d) Any amounts distributed to the Offered Certificates in
respect of interest pursuant to Sections 4.01(b)(xxx) which constitute Cap
Carryover Amounts shall first be deemed distributed by REMIC 2 as a distribution
to the Class CE Certificates, and then distributed to the Offered Certificates
from the Grantor Trust as payments on notional principal contracts in the nature
of cap contracts. Any remaining amount with respect to the Class CE Certificates
or any remaining Yield Maintenance Agreement Payment shall be treated as having
been distributed to the Holders of the Class CE Certificates from the Grantor
Trust.
(e) On each Distribution Date, Unpaid Realized Loss Amounts on
the Offered Certificates will be reduced by the amount of any Subsequent
Recoveries received during the related Prepayment Period in the same order as
Realized Loss Amortization Amounts are paid to the Offered Certificates pursuant
to Section 4.02(b) above.
Section 4.03 Allocation of Losses.
Any Applied Realized Loss Amount for a Distribution Date will be
allocated against the Class X-0, Xxxxx X-0, Class M-7, Class M-6, Class M-5,
Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in that order and
until the respective Certificate Principal Balances thereof are reduced to zero.
Section 4.04 Method of Distribution.
The Securities Administrator shall make distributions in respect
of a Distribution Date to each Certificateholder of record on the related Record
Date (other than as provided in Section 10.01 respecting the final
distribution), in the case of Certificateholders of the Certificates, by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Securities Administrator in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of such Certificates, or
by check mailed by first class mail to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate Register,
provided that the Securities Administrator may deduct a reasonable wire transfer
fee from any payment made by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Securities Administrator, the
Depositor or the Master Servicer shall have any responsibility therefor except
as otherwise provided by applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based on the Mortgage Loan
information contained in the Remittance Report, the Securities Administrator
shall prepare a statement (the "Distribution Date 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 Certificates allocable to principal,
separately identified and the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates allocable to
Prepayment Charges, Originator Prepayment Charge Payment Amounts and
Servicer Prepayment Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class CE Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the Targeted
Overcollateralization Amount as of such Distribution Date and the Monthly
Excess Interest Amount and Monthly Excess Cashflow Amount for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Servicers during the related Collection Period;
(v) the aggregate amount of Advances for the related Collection
Period, cumulative unreimbursed Advances and Servicing Advances and
cumulative nonrecoverable Advances;
(vi) the Pool Balance, at the close of business at the end of the
related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 to 59 days past due on a contractual basis, (b) 60 to 89 days
past due on a contractual basis, (c) 90 or more days past due on a
contractual basis, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(ix) the aggregate number of Mortgage Loans that became REO
Properties during the preceding calendar month and the aggregate Principal
Balance of such Mortgage Loans (calculated as of the date each such
Mortgage Loan became an REO Property);
(x) the total number and cumulative principal balance of all REO
Properties as of the close of business of the last day of the preceding
Collection Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses;
(xiii) the Certificate Principal Balance of each Class of
Certificates, after giving effect to the distributions, and allocations of
Realized Losses or Applied Realized Loss Amounts, as applicable, made on
such Distribution Date, separately identifying any reduction thereof due
to allocations of Realized Losses or Applied Realized Loss Amounts;
(xiv) the Accrued Certificate Interest in respect of each Class of
Certificates for such Distribution Date and any related Cap Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such Certificates on such
Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicers pursuant to the related Servicing Agreements;
(xvi) the Cap Carryover Amounts distributed on such Distribution
Date, the amounts remaining after giving effect to distributions thereof
on such Distribution Date, the amount of all Cap Carryover Amounts covered
by withdrawals from the Class A Reserve Account and Class M Reserve
Account on such Distribution Date and the amount distributed from the
Class A Reserve Account and Class M Reserve Account on such Distribution
Date to the Class CE Certificates;
(xvii) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xviii) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xix) the Available Funds;
(xx) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxi) the aggregate amount of Net Liquidation Proceeds for the
related Collection Period;
(xxii) the aggregate Principal Balance of Mortgage Loans purchased
by the Originators or the Seller during the related Prepayment Period and
indicating the section of this Agreement requiring the purchase of each
such Mortgage Loan;
(xxiii) the amount of the Credit Risk Manager Fee paid;
(xxiv) the number and aggregate Principal Balance of Mortgage Loans
that were the subject of a Principal Prepayment in full during the related
Prepayment Period, the aggregate Prepayment Charges collected, the
Servicer Prepayment Charge Payment Amounts paid by the Servicers or the
Originator Prepayment Charge Payment Amounts paid by the Originators; and
(xxv) the amount of Subsequent Recoveries received during the
related Prepayment Period.
The Securities Administrator may fully rely upon and shall have
no liability with respect to information with respect to the Mortgage Loans
provided by the Master Servicer.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
The Securities Administrator will make the Distribution Date
Statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to
Certificateholders, and other parties to this Agreement via the Securities
Administrator's Internet website. The Securities Administrator's Internet
website shall initially be located at "xxx.xxxxxxx.xxx." Assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at (000) 000-0000. Parties that are unable to use the website are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way the monthly statements to Certificateholders
are distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Securities Administrator shall provide
timely and adequate notification to all above parties regarding any such
changes.
(b) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish to the NIMS Insurer
and each Person who at any time during the calendar year was a Certificateholder
of a Regular Certificate, if requested in writing by such Person, such
information as is reasonably necessary to provide to such Person a statement
containing the information set forth in subclauses (i), (ii), (xiv) and (xvi)
above, aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished by the
Securities Administrator to Certificateholders pursuant to any requirements of
the Code as are in force from time to time.
(c) On each Distribution Date, the Securities Administrator shall
forward to the Class R Certificateholder a copy of the reports forwarded to the
Regular Certificateholders in respect of such Distribution Date with such other
information as the Securities Administrator deems necessary or appropriate. Such
obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished to Class R Certificateholder by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
force.
Section 4.07 Remittance Reports.
No later than the 24th day of each month (or if such 24th day is
not a Business Day, the preceding Business Day), the Master Servicer shall
deliver to the Securities Administrator, Trustee and the NIMS Insurer by
telecopy (or by such other means as the Master Servicer, the NIMS Insurer, the
Trustee and the Securities Administrator may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Master Servicer shall electronically forward to the Securities
Administrator in such medium as may be agreed between the Master Servicer and
the Securities Administrator the information set forth in such Remittance Report
with respect to the related Distribution Date and such information reasonably
available to the Master Servicer necessary in order for the Securities
Administrator to perform the calculations necessary to make the distributions
contemplated by Section 4.01, 4.02 and 4.03 and to prepare the Distribution Date
Statement. The Securities Administrator shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
Section 4.08 REMIC Distributions.
(a) On each Distribution Date, the Securities Administrator shall
cause in the following order of priority, the following amounts 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) to Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular Interest
LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4, REMIC 1
Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1 Regular
Interest LT1M7, REMIC 1 Regular Interest LT1M8, REMIC 1 Regular Interest
LT1M9 and REMIC 1 Regular Interest LT1ZZ, pro rata, in an amount equal to
(A) the Uncertificated Accrued Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued Interest in
respect of REMIC 1 Regular Interest LT1ZZ 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 LT1ZZ Uncertificated Accrued Interest
Deferral Amount and such amount will be payable to the Holders of REMIC 1
Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2, REMIC 1 Regular
Interest LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1M4,
REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest LT1M6, REMIC 1
Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8 and REMIC 1 Regular
Interest LT1M9 in the same proportion as the Overcollateralization
Deficiency is allocated to the Corresponding Certificates;
(ii) to Holder of REMIC 1 Regular Interest LT1XX, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates;
(iii) to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the REMIC 1 Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
(1) to REMIC 1 Regular Interest LT1AA, 98.00% of
such remainder, until the Uncertificated Principal Balance
of such Uncertificated REMIC 1 Regular Interest is reduced
to zero;
(2) to REMIC 1 Regular Interest LT1A1, REMIC 1
Regular Interest LT1A2, REMIC 1 Regular Interest LT1A3,
REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1
Regular Interest LT1M6, REMIC 1 Regular Interest LT1M7,
REMIC 1 Regular Interest LT1M8 and REMIC 1 Regular
Interest LT1M9, 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; then
(3) to REMIC 1 Regular Interest LT1ZZ, 1.00% of such
remainder, until the Uncertificated Principal Balance of
such REMIC 1 Regular Interest is reduced to zero;
provided, however, that (i) 98.00% and (ii) 2.00% of any
principal payments that are attributable to an Aggregate
Overcollateralization Release Amount shall be allocated to
(i) REMIC 1 Regular Interest LT1AA and (ii) REMIC 1
Regular Interest LT1ZZ, respectively; and
(iv) to the Holders of REMIC 1 Regular Interests, in an amount
equal to the REMIC 1 Sub WAC Allocation Percentage of Available Funds for
such Distribution Date after the distributions made pursuant to clause (i)
above, such that distributions of principal shall be deemed to be made to
the REMIC 1 Regular Interest LT1XX.
(b) The Securities Administrator shall cause the following
allocation of losses:
(i) The REMIC 1 Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Marker
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution
Date shall be allocated first, to Uncertificated Accrued Interest payable
to REMIC 1 Regular Interest LT1AA and REMIC 1 Regular Interest LT1ZZ 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
LT1AA, REMIC 1 Regular Interest LT1A1, REMIC 1 Regular Interest LT1A2,
REMIC 1 Regular Interest LT1A3, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1M4, REMIC 1 Regular Interest LT1M5, REMIC 1 Regular Interest
LT1M6, REMIC 1 Regular Interest LT1M7, REMIC 1 Regular Interest LT1M8,
REMIC 1 Regular Interest LT1M9 and REMIC 1 Regular Interest LT1ZZ, pro
rata, based on, and to the extent of, one month's interest at the then
applicable respective Uncertificated REMIC 1 Pass-Through Rate on the
respective Uncertificated Principal Balance of each such REMIC 1 Regular
Interest;
(ii) The REMIC 1 Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Sub WAC
Allocation Percentage of the aggregate amount of any Relief Act Interest
Shortfalls incurred in respect of the Mortgage Loans for any Distribution
Date shall be allocated to the REMIC 1 Regular Interest LT1XX;
(iii) The REMIC 1 Marker Allocation Percentage of all Realized
Losses on the Mortgage Loans shall be allocated by the Securities
Administrator on each Distribution Date to the following REMIC 1 Regular
Interests in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to REMIC 1 Regular Interest LT1AA
and REMIC 1 Regular Interest LT1ZZ 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 REMIC 1 Regular Interest LT1AA
and REMIC 1 Regular Interest LT1ZZ 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
LT1AA, REMIC 1 Regular Interest LT1M9 and REMIC 1 Regular Interest LT1ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC 1 Regular Interest LT1M9 has been reduced to zero, fourth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M8 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M8 has been reduced to zero, fifth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M7 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M7 has been reduced to zero, sixth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M6 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M6 has been reduced to zero; seventh, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M5 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M5 has been reduced to zero; eighth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M4 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M4 has been reduced to zero; ninth to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M3 has been reduced to zero; tenth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M2 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M2 has been reduced to zero; and eleventh, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC
1 Regular Interest LT1M1 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1M1 has been reduced to zero; and
(iv) The REMIC 1 Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on each
Distribution Date shall be allocated to REMIC 1 Regular Interest LT1XX.
(c) Notwithstanding anything to the contrary contained herein,
the above distributions in this Section 4.08 (other than on the Certificates)
are deemed distributions, and distributions of funds from the Distribution
Account shall be made only in accordance with Sections 4.01 and 4.02 hereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
-----------------
Each of the Class X-0, Xxxxx X-0, Class A-3. Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class CE, Class P and Class R Certificates shall be substantially in the
forms annexed hereto as exhibits, and shall, on original issue, be executed by
the Securities Administrator and authenticated and delivered by the Certificate
Registrar to or upon the receipt of a Written Order to Authenticate from the
Depositor concurrently with the sale and assignment to the Securities
Administrator of the Trust Fund. Each Class of the Offered Certificates shall be
initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar denomination of $25,000 and integral multiples of
$1 in excess thereof. The Class CE and Class P Certificates are issuable only in
minimum Percentage Interests of 10%. The Class R Certificate is issuable only as
a single certificate.
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Securities Administrator by a
Responsible Officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
such Certificate shall have been manually authenticated by the Certificate
Registrar substantially in the form provided for herein, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. Subject to Section
5.02(c), the Offered Certificates shall be Book-Entry Certificates. The Class
CE, Class P and Class R Certificates shall not be Book-Entry Certificates but
shall be issued in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Securities Administrator a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Securities
Administrator shall initially serve as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. The Securities Administrator as Certificate Registrar shall be subject
to the same standards of care, limitations on liability and rights to indemnity
as the Securities Administrator, and the provisions of Sections 8.01, 8.02,
8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the Certificate Registrar
to the same extent as they apply to the Securities Administrator. Any
Certificate Registrar appointed in accordance with this Section 5.02(a) may at
any time resign by giving at least 30 days' advance written notice of
resignation to the Securities Administrator, the Trustee, the Master Servicer
and the Depositor, such resignation to become effective upon appointment of a
successor Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Class R Certificate,
upon satisfaction of the conditions set forth below, the Securities
Administrator on behalf of the Trust shall execute and the Certificate Registrar
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute on behalf
of the Trust and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Securities Administrator or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Securities Administrator and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the initial Depository by, or on behalf of, the Depositor; or to, and deposited
with the Certificate Custodian, on behalf of the Depository, if directed to do
so pursuant to instructions from the Depository. Except as provided in paragraph
(c) below, the Book-Entry Certificates shall at all times remain registered in
the name of the Depository or its nominee and at all times: (i) registration of
such Certificates may not be transferred by the Securities Administrator except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Securities Administrator shall for all purposes deal with the Depository as
representative of the Certificate Owners of the Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; (vi)
the Securities Administrator may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners; and (vii) the
direct participants of the Depository shall have no rights under this Agreement
under or with respect to any of the Certificates held on their behalf by the
Depository, and the Depository may be treated by the Securities Administrator
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If the Depository advises the Securities Administrator in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and neither the Securities Administrator nor
the Depositor is able to locate a qualified successor, upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Securities Administrator shall, at the Trust's expense, execute on behalf of
the Trust and the Certificate Registrar shall authenticate definitive, fully
registered certificates (the "Definitive Certificates"). None of the Depositor
or the Securities Administrator shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, the
Securities Administrator, the Certificate Registrar, the Trustee, the Master
Servicer, any Paying Agent and the Depositor shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer, (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Certificate
Registrar, in substantially the form attached hereto as Exhibit J) under the
1933 Act, the Certificate Registrar and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Certificate Registrar and the Depositor
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the 1933 Act or is being made
pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of
the Certificate Registrar or the Depositor or (ii) the Certificate Registrar
shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Certificate Registrar certifying to the Depositor and the
Certificate Registrar the facts surrounding such transfer, which investment
letter shall not be an expense of the Certificate Registrar or the Depositor.
The Holder of a Private Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Certificate Registrar and the Depositor
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made
unless the Certificate Registrar shall have received either (i) a representation
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor (such requirement is
satisfied only by the Certificate Registrar's receipt of a representation letter
from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA, a plan subject to Section 4975
of the Code or a plan subject to any federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer or (ii) (except in the case
of the Class R Certificate) in the case of any such ERISA Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan or arrangement or
using such plan's or arrangement's assets, an Opinion of Counsel satisfactory to
the Certificate Registrar, to the effect that the purchase or holding of such
ERISA Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
Similar Law and will not subject the Depositor, the Master Servicer, the
Securities Administrator, the Trustee, the NIMS Insurer or the Certificate
Registrar to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of clause (i) of the preceding
sentence, such representation shall be deemed to have been made to the
Certificate Registrar by the acceptance by a Certificate Owner of the beneficial
interest in any such Class of ERISA-Restricted Certificates, unless the
Certificate Registrar shall have received from the transferee an alternative
representation acceptable in form and substance to the Depositor.
Notwithstanding anything else to the contrary herein, any purported transfer of
an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to ERISA, Section 4975 of the Code or Similar Law without the delivery
to the Certificate Registrar of an Opinion of Counsel satisfactory to the
Certificate Registrar as described above shall be void and of no effect.
Each Person who has or who acquires any Ownership Interest in the
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in the Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in the Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in the Class R Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in form
and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Class R 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 Class R Certificate.
(iv) Any attempted or purported transfer of any Ownership Interest
in the Class R 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 the Holder of the Class R
Certificate, then the prior Holder of such Class R Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
transfer of such Class R 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 Class R Certificate. The
Certificate Registrar shall be under no liability to any Person for any
registration of transfer of the Class R Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Class R Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Certificate Registrar received the documents specified in clause
(iii). The Securities Administrator shall be entitled to recover from any
Holder of the Class R Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made
on such Class R Certificate. Any such distributions so recovered by the
Securities Administrator shall be distributed and delivered by the
Securities Administrator to the prior Holder of such Class R Certificate
that is a Permitted Transferee.
(v) If any Person other than a Disqualified Organization acquires
any Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of the
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of the Class R
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 Securities Administrator to the previous Holder of the
Class R Certificate that is a Permitted Transferee, except that in the
event that the Securities Administrator determines that the Holder of the
Class R Certificate may be liable for any amount due under this Section or
any other provisions of this Agreement, the Securities Administrator may
withhold a corresponding amount from such remittance as security for such
claim. The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Securities Administrator and it
shall not be liable to any Person having an Ownership Interest in the
Class R Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Securities Administrator will
provide to the Internal Revenue Service, and to the persons specified in
Sections 860E(e)(3) and (6) of the Code, information needed to compute the
tax imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Securities Administrator
shall be entitled to reasonable compensation for providing such
information from the person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Securities Administrator, the Trustee, the Depositor, the
NIMS Insurer and the Certificate Registrar such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Securities Administrator or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Securities
Administrator shall execute on behalf of the Trust, and the Certificate
Registrar shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Percentage Interest. Upon the issuance of any new Certificate under
this Section, the Securities Administrator or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Securities Administrator and the Certificate
Registrar) in connection therewith. Any duplicate Certificate issued pursuant to
this Section, shall constitute complete and indefeasible evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Depositor, the NIMS Insurer, the
Securities Administrator, the Trustee, the Certificate Registrar, any Paying
Agent and any agent of the Master Servicer, the Depositor, the NIMS Insurer, the
Securities Administrator, the Trustee, the Certificate Registrar or any Paying
Agent may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and 4.02 and for all other
purposes whatsoever, and none of the Master Servicer, the Trust, the NIMS
Insurer, the Securities Administrator, the Trustee or any agent of any of them
shall be affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and 4.02 and shall report
the amounts of such distributions to the Securities Administrator. The duties of
the Paying Agent may include the obligation to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly existing
under the laws of the United States of America or any state thereof, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially be
the Securities Administrator. The Securities Administrator may appoint a
successor to act as Paying Agent, which appointment shall be reasonably
satisfactory to the Depositor, the NIMS Insurer and the Rating Agencies. The
Securities Administrator as Paying Agent shall be subject to the same standards
of care, limitations on liability and rights to indemnity as the Securities
Administrator, and the provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05,
8.14, 8.15 and 8.16 shall apply to the Paying Agent to the same extent as they
apply to the Securities Administrator. Any Paying Agent appointed in accordance
with this Section 5.05 may at any time resign by giving at least 30 days'
advance written notice of resignation to the Securities Administrator, the
Trustee, the Master Servicer, the NIMS Insurer and the Depositor, such
resignation to become effective upon appointment of a successor Paying Agent.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
The Master Servicer shall be liable in accordance herewith only
to the extent of the obligations specifically imposed upon and undertaken by the
Master Servicer herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.
Any entity into which the Master Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any organization succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the that the successor or
surviving Person to the Master Servicer shall satisfy all the requirements of
Section 7.02 with respect to the qualifications of a successor servicer.
Section 6.03 Master Servicer Not to Resign.
Subject to the provisions of Section 7.02, the Master Servicer
shall not resign from its obligations and duties hereby imposed on it except
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Securities Administrator, the Trustee and the NIMS Insurer. No such
resignation by the Master Servicer shall become effective until the Securities
Administrator, the Trustee or a successor master servicer shall have assumed the
Master Servicer's responsibilities and obligations in accordance with Section
8.05 hereof.
ARTICLE VII
DEFAULT
Section 7.01 Master Servicer Event of Termination.
(a) If any one of the following events (a "Master Servicer Event
of Termination") shall occur and be continuing:
(i) any failure by the Master Servicer to deposit amounts in the
Distribution Account in the amount and manner provided herein so as to
enable the Securities Administrator to distribute to Holders of
Certificates any payment required to be made under the terms of such
Certificates and this Agreement which continues unremedied by 3:00 P.M.
New York time on the required date of deposit; or
(ii) failure on the part of the Master Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Master Servicer set forth in the Certificates or in this Agreement, which
covenants and agreements continue unremedied for a period of 30 days after
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 Securities
Administrator, the Trustee or the Depositor, or to the Master Servicer,
the Depositor, the Securities Administrator and the Trustee by the Holders
of Certificates evidencing Voting Rights aggregating not less than 25% of
all Certificates affected thereby; or
(iii) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings against the Master Servicer, or for the winding up or
liquidation of the Master Servicer's affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(iv) the consent by the Master Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to substantially all of
its property; or 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 voluntarily suspend
payment of its obligations.
(b) Then, and in each and every such case, so long as a Master
Servicer Event of Termination shall not have been remedied within the applicable
grace period, the Trustee shall, at the direction of the NIMS Insurer or Holders
of each Class of Regular Certificates evidencing Percentage Interests
aggregating not less than 51%, by notice then given in writing to the Master
Servicer (and to the Trustee if given by Holders of Certificates), terminate all
of the rights and obligations of the Master Servicer as master servicer under
this Agreement. Any such notice to the Master Servicer shall also be given to
the Securities Administrator, the Servicers, each Rating Agency, the NIMS
Insurer and the Depositor. On or after the receipt by the Master Servicer (and
by the Trustee if such notice is given by the Holders) of such written notice,
all authority and power of the Master Servicer under this Agreement, whether
with respect to the Certificates or the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee as successor Master Servicer pursuant to and
under this Section 7.01 and Section 7.05(a), unless and until such time as the
Trustee shall appoint a successor Master Servicer pursuant to Section 7.05, and,
without limitation, the Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination. The Master Servicer agrees to cooperate with the Trustee in
effecting the termination of the responsibilities and rights of the Master
Servicer hereunder, including, without limitation, the transfer to the Trustee
for the administration by it of all cash amounts that have been deposited by the
Master Servicer in the Master Servicer Custodial Account or thereafter received
by the Master Servicer with respect to the Mortgage Loans. Upon obtaining
written notice or actual knowledge of the occurrence of any Master Servicer
Event of Termination, the Person obtaining such notice or knowledge shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency. All
costs and expenses (including attorneys' fees) incurred in connection with
amending this Agreement to reflect such succession as Master Servicer pursuant
to this Section 7.01 shall be paid by the predecessor Master Servicer.
Notwithstanding the termination of the Master Servicer pursuant hereto, the
Master Servicer shall remain liable for any causes of action arising out of any
Master Servicer Event of Termination occurring prior to such termination.
Section 7.02 Remedies of Trustee.
(a) During the continuance of any Master Servicer Event of
Termination, so long as such Master Servicer Event of Termination shall not have
been remedied, the Trustee, in addition to the rights specified in Section 7.01,
shall have the right, in its own name as trustee of an express trust, to take
all actions now or hereafter existing at law, in equity or by statute to enforce
its rights and remedies and to protect the interests, and enforce the rights and
remedies, of the Certificateholders (including the institution and prosecution
of all judicial, administrative and other proceedings and the filing of proofs
of claim and debt in connection therewith). Except as otherwise expressly
provided in this Agreement, no remedy provided for by this Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative and
in addition to any other remedy and no delay or omission to exercise any right
or remedy shall impair any such right or remedy or shall be deemed to be a
waiver of any Master Servicer Event of Termination.
Section 7.03 Directions by Certificateholders and Duties of
Trustee During Master Servicer Event of Termination.
During the continuance of any Master Servicer Event of
Termination, Holders of Certificates evidencing Voting Rights aggregating not
less than 25% of each Class of Certificates affected thereby may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee under
this Agreement; provided, however, that the Trustee shall be under no obligation
to pursue any such remedy, or to exercise any of the trusts or powers vested in
it by this Agreement (including, without limitation, (a) the conducting or
defending of any administrative action or litigation hereunder or in relation
hereto, and (b) the terminating of the Master Servicer or any successor Master
Servicer from its rights and duties as servicer hereunder) at the request, order
or direction of any of the Certificateholders, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities which may be incurred therein
or thereby and, provided further, that, subject to the provisions of Section
8.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee, based upon an Opinion of Counsel, determines that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
determines that the action or proceeding so directed would subject the Trustee
to a risk of personal liability or be unjustly prejudicial to the non-assenting
Certificateholders.
Section 7.04 Action upon Certain Failures of the Master Servicer
and upon Master Servicer Event of Termination.
In the event that a Responsible Officer of the Trustee shall have
actual knowledge of any failure of the Master Servicer specified in Section
7.01(a)(i) or (ii) which would become an Master Servicer Event of Termination
upon the Master Servicer's failure to remedy the same after notice, the Trustee
shall give notice thereof to the Master Servicer. If a Responsible Officer of
the Trustee shall have actual knowledge of a Master Servicer Event of
Termination, the Trustee shall give prompt written notice thereof to the
Certificateholders.
Section 7.05 Trustee to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice
of termination pursuant to Section 7.01, the Trustee (or other named successor)
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 placed on the Master Servicer by the terms and
provisions hereof or shall appoint a successor pursuant to this Section 7.05 and
the transition to such successor Master Servicer shall be fully effected within
90 days following the termination of the prior Master Servicer. Notwithstanding
the foregoing, (i) the parties hereto agree that the Trustee, in its capacity as
successor Master Servicer, immediately will assume all of the obligations of the
Master Servicer under this Agreement, (ii) the Trustee, in its capacity as
successor Master Servicer, shall not be responsible for the lack of information
and/or documents that it cannot obtain through reasonable efforts and (iii)
under no circumstances shall any provision of this Agreement be construed to
require the Trustee, acting in its capacity as successor to the Master Servicer
in its obligation to advance, expend or risk its own funds or otherwise incur
any financial liability in the performance of its duties hereunder if it shall
have reasonable grounds for believing that such funds are non-recoverable.
Subject to Section 7.05(b), as compensation therefor, the Trustee, as successor
Master Servicer, shall be entitled to such compensation as the terminated Master
Servicer would have been entitled to hereunder if no such notice of termination
had been given. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution having a net worth of not less than $10,000,000 as
the successor to the terminated Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder; provided, however, that any such institution appointed as
successor Master Servicer shall not, as evidenced in writing by each Rating
Agency, adversely affect the then current rating of any Class of Certificates
immediately prior to the termination of the terminated Master Servicer. The
appointment of a successor Master Servicer shall not affect any liability of the
predecessor Master Servicer which may have arisen under this Agreement prior to
its termination as Master Servicer, nor shall any successor Master Servicer be
liable for any acts or omissions of the predecessor Master Servicer or for any
breach by the Master Servicer of any of its representations or warranties
contained herein or in any related document or agreement. Pending appointment of
a successor to the terminated Master Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
provided above. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. All Master Servicing Transfer Costs shall be paid by the predecessor
Master Servicer upon presentation of reasonable documentation of such costs, and
if such predecessor Master Servicer defaults in its obligation to pay such
costs, such costs shall be paid by the successor Master Servicer or the Trustee
(in which case the successor Master Servicer or the Trustee shall be entitled to
reimbursement therefor from the assets of the Trust).
(b) In connection with the appointment of a successor Master
Servicer or the assumption of the duties of the Master Servicer, as specified in
Section 7.05(a), the Trustee may make such arrangements for the compensation of
such successor as it and such successor agree.
(c) Any successor, including the Trustee, to the Master Servicer
as master servicer shall during the term of its service as master servicer
maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as master servicer hereunder and
(ii) a fidelity bond in respect of its officers, employees and agents to the
same extent as the Master Servicer is so required pursuant to Section 3.24.
Section 7.06 Notification to Certificateholders.
Upon any termination or appointment of a successor to the Master
Servicer pursuant to this Article VII, the Securities Administrator shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to each Rating Agency, the
Servicers and the NIMS Insurer.
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator.
(a) The Trustee and the Securities Administrator, prior to the
occurrence of a Master Servicer Event of Termination of which a Responsible
Officer of the Trustee or the Securities Administrator, as applicable, shall
have actual knowledge and after the curing of all Master Servicer Events of
Termination which may have occurred, undertake to perform such duties and only
such duties as are specifically set forth in this Agreement, respectively. In
case a Master Servicer Event of Termination has occurred of which a Responsible
Officer of the Trustee shall have actual knowledge (which has not been cured or
waived), 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 reasonably prudent investor would exercise or use under the circumstances
in the conduct of such investor's own affairs. In case a Master Servicer Event
of Termination has occurred of which a Responsible Officer of the Securities
Administrator shall have actual knowledge (which has not been cured or waived),
the Securities Administrator shall exercise such of the rights and powers vested
in it by this Agreement, and use the same degree of care and skill in their
exercise as a reasonably prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
The Trustee and the Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee and the Securities Administrator
which are specifically required to be furnished pursuant to any provision of
this Agreement, shall examine them to determine whether they conform on their
face to the requirements of this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer, the Seller, the NIMS
Insurer or the Depositor hereunder. If any such instrument is found not to
conform in any material respect to the requirements of this Agreement, the
Trustee or the Securities Administrator, as the case may be, shall notify the
Certificateholders of such instrument in the event that the Trustee or the
Securities Administrator, after so requesting, does not receive a satisfactorily
corrected instrument.
(b) No provision of this Agreement shall be construed to relieve
the Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misfeasance;
provided, however, that:
(i) Prior to the occurrence of a Master Servicer Event of
Termination, and after the curing or waiver of all such Master Servicer
Events of Termination which may have occurred, the duties and obligations
of the Trustee and the Securities Administrator shall be determined solely
by the express provisions of this Agreement, the Trustee and the
Securities Administrator 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 the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities
Administrator, as the case may be, the Trustee or the Securities
Administrator, as applicable, 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 it by the Depositor or the
Master Servicer and which on their face, do not contradict 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;
(iii) The Trustee and the Securities Administrator 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
Certificateholders or the NIMS Insurer as provided in Section 7.03;
(iv) The Trustee shall not be charged with knowledge of a Master
Servicer Event of Termination under clauses (a)(i) through (a)(iv) of
Section 7.01 unless a Responsible Officer of the Trustee assigned to and
working in the Corporate Trust Office of the Trustee obtains actual
knowledge of such failure or event or any Responsible Officer of the
Trustee receives written notice of such failure or event at its Corporate
Trust Office from the Master Servicer, the Securities Administrator, the
Depositor, the NIMS Insurer or any Certificateholder. The Securities
Administrator shall not be charged with knowledge of any default specified
in clauses (a)(i) and (a)(ii) of Section 7.01 or an Event of Default under
clauses (a)(iii) and (a)(iv) of Section 7.01 unless a Responsible Officer
of the Securities Administrator assigned to and working in the Corporate
Trust Office of the Securities Administrator obtains actual knowledge of
such failure or event or any Responsible Officer of the Securities
Administrator receives written notice of such failure or event at its
Corporate Trust Office from the Master Servicer, the Trustee, the
Depositor, the NIMS Insurer or any Certificateholder; and
(v) Except to the extent provided in Section 7.05 in respect of the
Trustee as successor Master Servicer, no provision in this Agreement shall
require the Trustee or the Securities Administrator to expend or risk its
own funds or otherwise incur any personal financial liability in the
performance of any of its duties as Trustee or Securities Administrator
hereunder, or in the exercise of any of its rights or powers, if the
Trustee or the Securities Administrator shall have reasonable grounds for
believing that repayment of funds or adequate indemnity or security
satisfactory to it against such risk or liability is not reasonably
assured to it and none of the provisions contained in this Agreement shall
in any event require the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of
the Master Servicer under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Securities Administrator.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request and
rely upon, and shall be protected in acting or refraining from acting
upon, any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee and the Securities Administrator may consult with
counsel and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the rights or powers vested in it
by this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of the
Certificateholders or the NIMS Insurer pursuant to the provisions of this
Agreement, unless such Certificateholders or the NIMS Insurer shall have
offered to the Trustee or the Securities Administrator, as the case may
be, reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee or the Securities Administrator, as the case may be, to perform
any discretionary act enumerated in this Agreement shall not be construed
as a duty, and neither the Trustee nor the Securities Administrator shall
be answerable for other than its negligence or willful misconduct in the
performance of any such act;
(iv) neither the Trustee nor the Securities Administrator shall be
personally liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of
Termination which may have occurred, neither the Trustee nor the
Securities Administrator shall be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholders or the NIMS Insurer; provided, however,
that if the payment within a reasonable time to the Trustee or the
Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, not reasonably assured to the Trustee or the
Securities Administrator, as applicable, by the security afforded to it by
the terms of this Agreement, the Trustee or the Securities Administrator,
as the case may be, may require reasonable indemnity against such cost,
expense or liability as a condition to such proceeding;
(vi) the Trustee shall not be accountable, have any liability or
make any representation as to any acts or omissions hereunder of the
Master Servicer until such time as the Trustee may be required to act as
Master Servicer pursuant to Section 7.02;
(vii) the Trustee and the Securities Administrator may each execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys or a custodian and
neither the Trustee nor the Securities Administrator shall be responsible
for any misconduct or negligence on the part of any such agent, attorney
or custodian appointed by it with due care; and
(viii) the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Neither the Trustee nor the Securities Administrator
Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the signature of the Securities Administrator on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee nor the
Securities Administrator assumes any responsibility for the correctness of the
same. Neither the Trustee nor the Securities Administrator makes any
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the signature of the Securities Administrator on the
Certificates) or of any Mortgage Loan or Related Document. Neither the Trustee
nor the Securities Administrator shall be accountable for the use or application
by the Master Servicer, or for the use or application of any funds paid to the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Distribution Account by the Master Servicer. Neither the Trustee nor
the Securities Administrator shall at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust or its ability to generate the payments
to be distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor or the Master Servicer with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation prior to the Trustee's or
Securities Administrator's receipt of written notice or actual knowledge of any
non-compliance therewith or any breach thereof; any investment of monies by or
at the direction of the Master Servicer or any loss resulting therefrom, it
being understood that the Trustee and the Securities Administrator shall remain
responsible for any Trust property that they may hold in their individual
capacity; the acts or omissions of any of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), or any Mortgagor; any action of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02), taken in the name of the Trustee or the Securities Administrator; the
failure of the Master Servicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee or the Securities
Administrator taken at the instruction of the Master Servicer (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); provided, however, that the foregoing shall not relieve the Trustee and
the Securities Administrator of their obligation to perform their respective
duties under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to them
hereunder.
Section 8.04 Trustee and Securities Administrator May Own
Certificates.
The Trustee and the Securities Administrator in their individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights as they would have if they were not Trustee or Securities
Administrator, respectively, and may transact any banking and trust business
with the Master Servicer, the Depositor or their Affiliates.
Section 8.05 Securities Administrator's Fees and Expenses and
Trustee Fees and Expenses.
The Securities Administrator and the Trustee, as compensation for
their respective services hereunder, shall each be entitled to a fee in an
amount agreed upon between the Master Servicer and either the Securities
Administrator or the Trustee, as applicable, payable by the Master Servicer out
of its own funds and not out of any funds of the Trust Fund. The Trust shall
reimburse the Trustee and the Securities Administrator for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or the
Securities Administrator, as the case may be, in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of their counsel and of all persons not regularly in
their employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith or which is the responsibility of Certificateholders
or the Trustee or Securities Administrator, as the case may be, hereunder. In
addition, the Trustee and the Securities Administrator and their officers,
directors, employees and agents shall be indemnified by the Trust from, and held
harmless against, any and all losses, liabilities, damages, claims or expenses
arising out of or in connection with any claim or legal action relating to the
acceptance or administration of their respective obligations and duties under
this Agreement, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence of the Trustee or the Securities
Administrator, as the case may be, in the performance of its duties hereunder or
by reason of its reckless disregard of obligations and duties hereunder.
Further, each Custodian and their officers, directors, employees and agents
shall be indemnified by the Trust from, and held harmless against, any and all
losses, liabilities, damages, claims or expenses arising out of or in connection
with any claim or legal action relating to the acceptance or administration of
their respective obligations and duties under this Agreement or any Custodial
Agreement, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence of such Custodian in the
performance of its duties hereunder or under the applicable Custodial Agreement
or by reason of its reckless disregard of obligations and duties hereunder or
under the applicable Custodial Agreement. This Section shall survive termination
of this Agreement or the resignation or removal of any Trustee, Securities
Administrator or Custodian hereunder.
Section 8.06 Eligibility Requirements for Trustee and the
Securities Administrator.
The Trustee and the Securities Administrator hereunder shall at
all times be an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of "BBB" by S&P and a long
term debt rating of at least "A1" or better by Xxxxx'x and subject to
supervision or examination by federal or state authority. The Trustee shall not
be an affiliate of the Depositor or the Master Servicer. If such entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee and
the Securities Administrator (other than the initial Trustee or Securities
Administrator) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee at the time such Trustee or Securities
Administrator is appointed Trustee or Securities Administrator to the effect
that the Trust will not be a taxable entity under the laws of such state. In
case at any time the Trustee or the Securities Administrator shall cease to be
eligible in accordance with the provision of this Section 8.06, the Trustee or
the Securities Administrator, as the case may be, shall resign immediately in
the manner and with the effect specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee and the Securities
Administrator.
The Trustee or the Securities Administrator may at any time
resign and be discharged from the trusts hereby created by giving written notice
thereof to the Depositor, the Master Servicer, the Servicers, the NIMS Insurer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee or Securities Administrator, as
applicable, reasonably acceptable to the NIMS Insurer by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee or Securities Administrator, as applicable, and one copy to the
successor Trustee or Securities Administrator, as the case may be. If no
successor Trustee or Securities Administrator, as applicable, shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee or Securities Administrator,
as applicable, may petition any court of competent jurisdiction for the
appointment of a successor Trustee or Securities Administrator, as applicable.
If at any time the Trustee or Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 8.05 and shall
fail to resign after written request therefor by the Master Servicer or the NIMS
Insurer, or if at any time the Trustee or the Securities Administrator shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or the Securities Administrator or of their respective
property shall be appointed, or any public officer shall take charge or control
of the Trustee or the Securities Administrator or of their respective property
or affairs for the purpose of rehabilitation, conservation or liquidation, then
the Master Servicer or the NIMS Insurer may remove the Trustee or the Securities
Administrator, as the case may be, and appoint a successor Trustee or Securities
Administrator, as applicable, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee or the Securities
Administrator, as applicable, so removed and one copy to the successor Trustee
or the Securities Administrator, as applicable.
The Majority Certificateholders or the NIMS Insurer may at any
time remove the Trustee or Securities Administrator by written instrument or
instruments delivered to the Master Servicer, the Depositor, the NIMS Insurer,
the Securities Administrator and the Trustee; the Depositor shall thereupon use
its best efforts to appoint a successor Trustee or Securities Administrator, as
the case may be, reasonably acceptable to the NIMS Insurer in accordance with
this Section.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee pursuant to any of the
provisions of this Section 8.07 shall become effective upon acceptance of
appointment by the successor Trustee or Securities Administrator, as the case
may be, as provided in Section 8.08
Section 8.08 Successor Trustee or Securities Administrator.
Any successor Trustee or Securities Administrator appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor, the NIMS Insurer, the Rating Agencies, the Master Servicer, the
Servicers and to its predecessor Trustee or Securities Administrator, as the
case may be, an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor Trustee or Securities
Administrator shall become effective, and such successor Trustee or Securities
Administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee or Securities
Administrator, as the case may be. The Depositor, the Master Servicer and the
predecessor Trustee or Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee or Securities
Administrator, as the case may be, all such rights, powers, duties and
obligations.
No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee or Securities Administrator, as the case may
be, shall be eligible under the provisions of Section 8.06 and the appointment
of such successor Trustee or Securities Administrator, as applicable, shall not
result in a downgrading of the Regular Certificates by either Rating Agency, as
evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee or
Securities Administrator, as applicable, as provided in this Section 8.08, the
Master Servicer shall cooperate to mail notice of the succession of such Trustee
or Securities Administrator, as the case may be, hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register, to the
NIMS Insurer and to each Rating Agency. If the Master Servicer fails to mail
such notice within ten days after acceptance of appointment by the successor
Trustee or Securities Administrator, the successor Trustee or Securities
Administrator, as the case may be, shall cause such notice to be mailed at the
expense of the Master Servicer.
Section 8.09 Merger or Consolidation of Trustee or Securities
Administrator.
Any entity into which the Trustee or Securities Administrator, as
applicable, may be merged or converted or with which it may be consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Trustee or Securities Administrator, as applicable, shall be a party, or any
entity succeeding to the business of the Trustee or Securities Administrator, as
the case may be, shall be the successor of the hereunder, provided such entity
shall be eligible under the provisions of Section 8.06 and 8.08, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the 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 the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Master Servicer and
the Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer and the
NIMS Insurer. If the Master Servicer and the NIMS Insurer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Master Servicer Event of Termination shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06, and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the 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 the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Master Servicer Event
of Termination, the Trustee acting alone may accept the resignation or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the NIMS Insurer, the Rating Agencies and
the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the Securities Administrator,
not in its individual capacity but solely as Securities Administrator of the
Trust, in the exercise of the powers and authority conferred and vested in it by
this Agreement. Each of the undertakings and agreements made on the part of the
Securities Administrator in the Certificates is made and intended not as a
personal undertaking or agreement by the Securities Administrator but is made
and intended for the purpose of binding only the Trust.
Section 8.12 Trustee or Securities Administrator May Enforce
Claims Without Possession of Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee or the Securities
Administrator without the possession of any of the Certificates or the
production thereof in any proceeding relating thereto, and such preceding
instituted by the Trustee or the Securities Administrator shall be brought in
its own name or in its capacity as Trustee or Securities Administrator. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee or Securities
Administrator, as the case may be, or their agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been recovered.
(b) The Trustee shall afford the Depositor, the Master Servicer,
the Securities Administrator, the NIMS Insurer and each Certificateholder upon
reasonable notice during the Trustee's normal business hours, access to all
records maintained by the Trustee in respect of its duties hereunder and access
to officers of the Trustee responsible for performing such duties. The Trustee
shall cooperate fully with the Master Servicer, the Securities Administrator,
the NIMS Insurer, the Depositor and such Certificateholder and shall make
available to the Master Servicer, the Securities Administrator, the NIMS
Insurer, the Depositor and such Certificateholder for review and copying at the
expense of the party requesting such copies, such books, documents or records as
may be requested with respect to the Trustee's duties hereunder. The Depositor,
the Master Servicer, the Securities Administrator, the NIMS Insurer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
(c) The Securities Administrator shall afford the Depositor, the
Trustee, the Master Servicer, the NIMS Insurer and each Certificateholder upon
reasonable notice during normal business hours, access to all records maintained
by the Securities Administrator in respect of its duties hereunder and access to
officers of the Securities Administrator responsible for performing such duties.
The Securities Administrator shall cooperate fully with the Master Servicer, the
Trustee, the NIMS Insurer, the Depositor and such Certificateholder and shall
make available to the Master Servicer, the Trustee, the NIMS Insurer, the
Depositor and such Certificateholder for review and copying at the expense of
the party requesting such copies, such books, documents or records as may be
requested with respect to the Securities Administrator's duties hereunder. The
Depositor, the Trustee, the Master Servicer, the NIMS Insurer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Securities Administrator and are not obligated to
supervise the performance of the Securities Administrator under this Agreement
or otherwise.
Section 8.13 Suits for Enforcement.
In case a Master Servicer Event of Termination or other default
by the Master Servicer hereunder shall occur and be continuing, the Trustee may
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee post a bond or other surety with
any court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Appointment of Custodian.
Each of the Custodians are hereby appointed to act in their
respective custodial capacities and the Trustee shall have no responsibility or
liability for any act or omission of Xxxxx Fargo Bank, N.A., as a Custodian. The
Trustee may at any time on or after the Closing Date, with the consent of the
Depositor, the Securities Administrator 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 one or more custodial agreements in a form acceptable
to the Depositor, the Securities Administrator and the Master Servicer. Subject
to this Article VIII, the Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodians for the benefit of the Certificateholders. Each Custodian shall be a
depository institution subject to supervision by federal or state authority,
shall have a 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.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Securities Administrator shall make or cause to be made
REMIC elections for each of REMIC 1 and REMIC 2 as set forth in the Preliminary
Statement on Forms 1066 or other appropriate federal tax or information return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. The regular interests and residual interest in each
REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Securities Administrator shall pay any and all tax
related expenses (not including taxes) of each REMIC, including but not limited
to any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to such REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Securities Administrator in fulfilling
its duties hereunder. The Securities Administrator shall be entitled to
reimbursement of expenses to the extent provided in clause (i) above from the
Trust.
(d) The Securities Administrator shall prepare or cause to be
prepared, the Trustee shall sign and the Securities Administrator shall file or
cause to be filed, each REMIC's federal and state tax and information returns as
such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Securities Administrator.
(e) The Holder of the Class R Certificate shall be the "tax
matters person" as defined in the REMIC Provisions (the "Tax Matters Person")
with respect to each REMIC, and the Securities Administrator is irrevocably
designated as and shall act as attorney-in-fact and agent for such Tax Matters
Person for each REMIC. The Securities Administrator, as agent for the Tax
Matters Person, shall perform, on behalf of each REMIC, all reporting and other
tax compliance duties that are the responsibility of such REMIC under the Code,
the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Securities Administrator, as agent for the Tax Matters Person, shall provide (i)
to the Treasury or other governmental authority such information as is necessary
for the application of any tax relating to the transfer of the Class R
Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Securities Administrator, the Trustee, the Master
Servicer, and the Holders of Certificates shall take any action or cause any
REMIC formed under this Agreement to take any action necessary to create or
maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. None of
the Trustee, the Securities Administrator, the Master Servicer or the Holder of
the Class R Certificate shall take any action or cause any REMIC formed under
this Agreement to take any action or fail to take (or fail to cause to be taken)
any action that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of such REMIC as a REMIC or (ii) result in
the imposition of a tax upon such REMIC (including but not limited to the tax on
prohibited transactions as defined in Code Section 860F(a)(2) and the tax on
prohibited contributions set forth on Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Securities Administrator, the
Trustee, the NIMS Insurer and the Master Servicer have received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the effect
that the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with respect
to any REMIC formed under this Agreement or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of the Class R Certificate will consult with the
Securities Administrator, the Trustee, the NIMS Insurer and the Master Servicer,
or their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to such REMIC, and no
such Person shall take any such action or cause such REMIC to take any such
action as to which the Securities Administrator, the Trustee, the NIMS Insurer
or the Master Servicer has advised it in writing that an Adverse REMIC Event
could occur.
(g) The Holder of the Class R Certificate shall pay when due any
and all taxes imposed on any REMIC formed under this Agreement by federal or
state governmental authorities, but only from amounts, if any, distributable
thereon. To the extent that such REMIC taxes are not paid by the Class R
Certificateholder, the Securities Administrator e shall pay any remaining REMIC
taxes out of future amounts otherwise distributable to the Holder of the Class R
Certificate or, if no such amounts are available, out of other amounts held in
the Distribution Account, and shall reduce amounts otherwise payable to Holders
of the REMIC Regular Interests or the Certificates, as the case may be.
(h) The Securities Administrator, shall, for federal income tax
purposes, maintain or cause to be maintained books and records with respect to
each REMIC formed under this Agreement on a calendar year and on an accrual
basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) None of the Securities Administrator, the Trustee or the
Master Servicer shall enter into any arrangement by which any REMIC will receive
a fee or other compensation for services.
(k) On or before April 15 of each calendar year, beginning in
2005, the Securities Administrator shall deliver to each Rating Agency and the
NIMS Insurer an Officer's Certificate stating the Securities Administrator's
compliance with the provisions of this Section 9.01.
(l) The Securities Administrator shall treat (i) the rights of
the Offered Certificates to receive Cap Carryover Amounts as a right in interest
rate cap contracts written by the Class CE Certificateholders in favor of the
Holders of the Offered Certificates and (ii) the rights of the Class CE
Certificates under the Class A Yield Maintenance Agreement and Class M Yield
Maintenance Agreement in accordance with the terms thereof and shall assign such
rights for federal tax return and information reporting a value of zero. The
Securities Administrator shall account for such as property held separate and
apart from the regular interests it holds in each of the REMICs created
hereunder. The provisions of this paragraph are intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with regular interests to be separately respected and
shall be interpreted consistent with such regulation. On each Distribution Date,
to the extent the Offered Certificates receive interest in excess of their
Certificate Interest Rate, such interest will be treated as distributed to the
Class CE Certificates, together with any amounts deposited in the Class A
Reserve Account in respect of the Class A Yield Maintenance Agreement and the
Class M Reserve Account in respect of the Class M Yield Maintenance Agreement,
and then paid to the respective Classes of Offered Certificates pursuant to the
related interest rate cap agreement.
Section 9.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer, the Securities
Administrator or the Trustee shall sell, dispose of, or substitute for any of
the Mortgage Loans, except in a disposition pursuant to (i) the foreclosure of a
Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
any REMIC pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant
to Article II of this Agreement, nor acquire any assets for any REMIC
constituting part of the Trust Fund, nor sell or dispose of any investments in
the Distribution Account for gain, nor accept any contributions to any REMIC
constituting part of the Trust Fund after the Closing Date, unless such party
and the NIMS Insurer has received an Opinion of Counsel (at the expense of the
party causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of such REMIC as a REMIC or of the interests therein other than the Class
R Certificate as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of the
assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause such REMIC to be subject to a tax on
prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as
a REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as
a result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the Holder
of the Class R Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Master Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Securities Administrator, the
Depositor, the Servicers or the Holder of the Class R Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of the Class R Certificate on which the Master Servicer has relied.
The foregoing shall not be deemed to limit or restrict the rights and remedies
of the Holder of the Class R Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall the Master
Servicer have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Master Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).
Section 9.04 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund consisting
of the right of the Class P Certificates to receive Prepayment Charges,
Originator Prepayment Charge Payment Amounts and Servicer Prepayment Charge
Payment Amounts, the right of the Offered Certificates to receive Cap Carryover
Amounts, the Reserve Accounts and the right of the Class CE Certificates to
receive Yield Maintenance Agreement Payments subject to the obligation of the
Class CE Certificates to pay Cap Carryover Amounts, shall be treated as a
"grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the
Securities Administrator shall furnish or cause to be furnished (i) to the
Holders of the Offered Certificates, (ii) to the Holders of the Class P
Certificates and (iii) to the Holder of the Class CE Certificates and shall file
or cause to be filed with the Internal Revenue Service together with Form 1041
or such other form as may be applicable, their allocable shares of income and
expenses with respect to the property held by the Grantor Trust, at the time or
times and in the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Master
Servicer, the Depositor, the Securities Administrator, the Trustee and the
Certificate Registrar created hereby (other than the obligation of the
Securities Administrator to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Securities Administrator upon the earliest of (i) the Distribution Date on which
the Certificate Principal Balance of each Class of Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust, and (iii) the optional purchase by the NIMS Insurer, if there is a
NIMS Insurer, or if there is no NIMS Insurer, the Majority Class CE
Certificateholders or, if such holder is the Seller or is affiliated with the
Seller or there is no Majority Class CE Certificateholders, the Master Servicer,
or if the Master Servicer fails to act, HomEq, as described below.
Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
The NIMS Insurer, if there is a NIMS Insurer, or if there is no
NIMS Insurer, the Majority Class CE Certificateholders (and, if such holder is
the Seller or an affiliate of the Seller, the Master Servicer of the Mortgage
Loans, or if the Master Servicer fails to act, HomEq) may, at its option,
terminate the Trust Fund and retire the Certificates on the next succeeding
Distribution Date upon which the aggregate current Pool Balance is less than 10%
of the aggregate Pool Balance of the Mortgage Loans as of the Cut-off Date by
purchasing all of the outstanding (i) Mortgage Loans in the Trust Fund at a
price equal to the sum of the outstanding Principal Balance of the Mortgage
Loans and except to the extent previously advanced by the Master Servicer,
accrued and unpaid interest thereon at the weighted average of the Mortgage
Interest Rates through the end of the Collection Period preceding the final
Distribution Date plus unreimbursed Servicing Advances, Advances and any unpaid
Servicing Fees allocable to such Mortgage Loans and (ii) REO Properties in the
Trust Fund at a price equal to their fair market value as determined in good
faith by the Master Servicer (the "Termination Price"). If the NIMS Insurer or
the Majority Class CE Certificateholders (or, if the Majority Class CE
Certificateholder is the Seller or an affiliate of the Seller, the Master
Servicer, or if the Master Servicer fails to act, HomEq) is subject to
regulation by the OCC, the FDIC, the Federal Reserve or the Office of Thrift
Supervision, however, the option may not be exercised unless the aggregate fair
market value of the Mortgage Loans and REO Properties is greater than or equal
to the Termination Price. Notwithstanding the foregoing, no party may exercise
this optional purchase right unless any Reimbursement Amount owed to the Trust
pursuant to Section 2.03 hereof has been paid.
Any such purchase shall be accomplished by delivery on the
Determination Date before such Distribution Date of the Termination Price to the
Securities Administrator for deposit into the Distribution Account as part of
Available Funds.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Securities
Administrator for payment of the final distribution and cancellation, shall be
given promptly by the Securities Administrator upon the Securities Administrator
receiving notice of such date from the NIMS Insurer, the Majority Class CE
Certificateholders, the Master Servicer or HomEq, as applicable, by letter to
the Certificateholders mailed not earlier than the 15th day of the month
preceding the month of such final distribution and not later than the 15th day
of the month of such final distribution specifying (1) the Distribution Date
upon which final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the Securities
Administrator therein designated, (2) the amount of any such final distribution
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Securities Administrator therein
specified. Not less than five (5) Business Days prior to such Determination Date
relating to such Distribution Date, the Securities Administrator shall notify
the Originator and the Seller of the amount of any unpaid Reimbursement Amount
owed to the Trust.
(c) Upon presentation and surrender of the Certificates, the
Securities Administrator shall cause to be distributed to the Holders of the
Certificates on the Distribution Date for such final distribution, in proportion
to the Percentage Interests of their respective Class and to the extent that
funds are available for such purpose, an amount equal to the amount required to
be distributed to such Holders in accordance with the provisions of Sections
4.01 and 4.02 for such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Securities Administrator shall promptly following such
date cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate escrow
account for the benefit of such Certificateholders, and the Master Servicer
shall give a second written notice to the remaining Certificateholders, to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholder shall be entitled to all unclaimed funds and other assets
which remain subject hereto (except with respect to the Class CE and Class P
Certificates) and the Securities Administrator upon transfer of such funds shall
be discharged of any responsibility for such funds, and all other
Certificateholders shall look to the Class R Certificateholder for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the NIMS Insurer, the Majority Class CE
Certificateholders, the Master Servicer or HomEq, as applicable, exercises its
purchase option as provided in Section 10.01, the Trust shall be terminated in
accordance with the following additional requirements, unless the Securities
Administrator shall have been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
will not (i) result in the imposition of taxes on "prohibited transactions" of
the Trust as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates (other than the Class P Certificates) are outstanding:
(i) The Securities Administrator shall designate a date within 90
days prior to the final Distribution Date as the date of adoption of plans
of complete liquidation of each of REMIC 1 and REMIC 2 and shall specify
such date in the final federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Securities
Administrator shall sell all of the assets of the Trust to the Majority
Class CE Certificateholders or the Master Servicer, as applicable, for
cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or
cause to be distributed or credited in the following order of priority (A)
(i) to the Holders of each of the Class A-1, Class A-2 and Class A-3
Certificates, pro rata, and (ii) to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, the related Certificate Principal Balance, as applicable,
plus one month's interest thereon at the applicable Certificate Interest
Rate, (B) to the Class CE Certificates, the amount of any remaining
Monthly Excess Cashflow Amounts not previously distributed thereon, (C) to
the remaining REMIC 1 Regular Interests the amounts allocable thereto
pursuant to Section 4.08 and (D) to the Class R Certificateholder, all
cash on hand in respect of the REMICs after such payment (other than cash
retained to meet claims) and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Securities Administrator as their attorney in fact
to: (i) designate such date of adoption of plans of complete liquidation and
(ii) to take such other action in connection therewith as may be reasonably
required to carry out such plans of complete liquidation all in accordance with
the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Securities Administrator and the Trustee; with the
consent of the NIMS Insurer and without the consent of the Certificateholders,
(i) to cure any ambiguity or mistake, (ii) to correct, modify or supplement any
provision herein which may be inconsistent with any other provision herein or
the Prospectus Supplement, (iii) to make any other provisions with respect to
matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement, (iv) to comply with any
requirements imposed by the Code or (v) to provide for the rights of the NIMS
Insurer; provided, however, that any such action listed in clause (iii) above
shall not adversely affect in any respect the interests of any
Certificateholder, as evidenced by (i) notice in writing to the Depositor, the
Master Servicer, the Securities Administrator and the Trustee from the Rating
Agencies that such action will not result in the reduction or withdrawal of the
rating of any outstanding Class of Certificates with respect to which it is a
Rating Agency, or (ii) an Opinion of Counsel delivered to the Master Servicer,
the Securities Administrator and the Trustee.
In addition, this Agreement may be amended from time to time by
the Depositor, the Master Servicer, the Securities Administrator and the
Trustee, with the consent of the NIMS Insurer and the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a majority of the Percentage Interest in such Class,
or (z) reduce the percentage of Voting Rights required by clause (y) above
without the consent of the Holders of all Certificates of such Class then
outstanding. Upon approval of an amendment, a copy of such amendment shall be
sent to the Rating Agencies. Prior to the execution of any amendment to this
Agreement, the Trustee and the Securities Administrator shall be entitled to
receive and rely upon an Opinion of Counsel (at the expense of the Person
seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. Each of the Securities Administrator
and Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's or Securities Administrator's, as the case may be,
own rights, duties or immunities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary,
none of the Securities Administrator, the Trustee or the NIMS Insurer shall
consent to any amendment to this Agreement unless it shall have first received
an Opinion of Counsel, delivered by (and at the expense of) the Person seeking
such Amendment, to the effect that such amendment will not result in the
imposition of a tax on any REMIC constituting part of the Trust Fund pursuant to
the REMIC Provisions or cause any REMIC constituting part of the Trust Fund to
fail to qualify as a REMIC or the Grantor Trust to fail to qualify as a grantor
trust at any time that any Certificates are outstanding and that the amendment
is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Securities
Administrator shall furnish, at the expense of the Person that requested the
amendment if such Person is the Master Servicer (but in no event at the expense
of the Trustee), otherwise at the expense of the Trust, a copy of such amendment
and the Opinion of Counsel referred to in the immediately preceding paragraph to
the Master Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Securities Administrator may prescribe.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the 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 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 herein provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of
the State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to (a) in
the case of the Trustee, Deutsche Bank National Trust Company, 0000 Xxxx Xx.
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration -
BA04H1, (b) in the case of the Securities Administrator, Xxxxx Fargo Bank, N.A.,
X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services -
ABFC 2004-HE1 with a copy to: (i) Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Services - ABFC
2004-HE1 and (ii) Xxxxx Fargo Bank, N.A., Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services - ABFC
2004-HE1, or such other address as may hereafter be furnished to the Depositor,
the Trustee, the NIMS Insurer and the Master Servicer in writing by the Trustee,
(c) in the case of the Master Servicer, Xxxxx Fargo Bank, N.A., 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, or such other address as may be
furnished to the Depositor, the Securities Administrator, the NIMS Insurer and
the Trustee in writing by the Master Servicer, (d) in the case of the Depositor,
Asset Backed Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: ABFC Asset-Backed Certificates, Series
2004-HE1, or such other address as may be furnished to the Master Servicer, the
Securities Administrator, the NIMS Insurer and the Trustee in writing by the
Depositor and (e) in the case of the NIMS Insurer, such address furnished to the
Depositor, the Master Servicer, the Securities Administrator and the Trustee 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 prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Master Servicer Event of Termination shall be given by telecopy and by certified
mail. Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies and the NIMS Insurer.
(a) Each of the Trustee and the Master Servicer shall be
obligated to use its best reasonable efforts promptly to provide notice to the
Rating Agencies and the NIMS Insurer with respect to each of the following of
which a Responsible Officer of the Trustee, the Securities Administrator or the
Master Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of Termination
that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer, the
Securities Administrator or the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class; and
(v) any change in the location of any Account.
(vi) In addition, the Master Servicer shall promptly furnish to
each Rating Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.16 hereof; and
(B) each annual independent public accountants' servicing
report described in Section 3.17 hereof; and
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to:
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Attention: Managing Director, Residential Mortgage-Backed Securities;
and Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance
Group.
Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, none of
the Regular Certificateholders, the Securities Administrator nor the Trustee
shall have any obligation to consent to any amendment or modification of this
Agreement unless they have been provided reasonable security or indemnity
against their out-of-pocket expenses (including reasonable attorneys' fees) to
be incurred in connection therewith.
Section 11.10 Third Party Beneficiary.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the
parties hereto, the NIMS Insurer, HomEq (solely for purposes of Section 3.20)
and each Custodian (solely for purposes of Section 8.05) and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement directly against the
parties to this Agreement.
In addition, the HomEq shall be deemed a intended third party
beneficiary with respect to Section 3.20 hereof and shall be entitled to enforce
the Trust's obligations thereunder.
Further, each Custodian shall be deemed a intended third party
beneficiary with respect to Section 8.05 hereof and shall be entitled to enforce
the Trust's obligations thereunder.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and such action shall become
effective when such instrument or instruments are delivered to the Trustee, the
Securities Administrator and the Master Servicer. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "act" of the Certificateholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and conclusive in favor of the Securities Administrator, the Trustee and the
Trust, if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee, the
Securities Administrator or the Trust in reliance thereon, whether or not
notation of such action is made upon such Certificate.
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Securities Administrator and the Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
ASSET BACKED FUNDING
CORPORATION, as Depositor
By:_______________________________________
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A., as Master
Servicer
By:_______________________________________
Name:
Title:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_______________________________________
Name: Xxx Xxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee
By:_______________________________________
Name:
Title:
By:_______________________________________
Name:
Title:
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 26th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxxx X. Xxxxxx, known to me to be a Vice
President of Asset Backed Funding Corporation, 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 MARYLAND )
) ss.:
COUNTY OF )
On the 26th day of August, 2004 before me, a notary public in and
for said State, personally appeared __________, known to me to be a __________
of Xxxxx Fargo Bank, N.A., 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 MARYLAND )
) ss.:
COUNTY OF )
On the 26th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxx Xxxxx, known to me to be a Vice
President of Xxxxx Fargo Bank, N.A., 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 CALIFORNIA )
) ss.:
COUNTY OF )
On the 26th day of August, 2004 before me, a notary public in and
for said State, personally appeared _____________, known to me to be a
____________ 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 corporation, 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
[FORM OF THE CLASS A-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS A-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class A-1 Original Class Certificate Principal
Balance of the Class A-1 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $306,897,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JK 9 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJK98 Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class A-1 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class A-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-1 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class A-1
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-1 Certificates.
The Class A-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:______________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT A-2
[FORM OF THE CLASS A-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS A-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class A-2 Original Class Certificate Principal
Balance of the Class A-2 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $346,754,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
Trustee: Deutsche Bank National Trust
CUSIP: 04542B JL 7 Company
ISIN: US04542BJL71 Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class A-2 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class A-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-2 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class A-2
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-2 Certificates.
The Class A-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT A-3
[FORM OF THE CLASS A-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS A-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class A-3 Original Class Certificate Principal
Balance of the Class A-3 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $68,976,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JM 5 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJM54
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class A-3 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class A-3 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class A-3 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class A-3
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-3 Certificates.
The Class A-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-1
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-1 Original Class Certificate Principal
Balance of the Class M-1 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $45,594,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JP 8 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJP85
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-1 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-1 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-1 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-1
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-2
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-2 Original Class Certificate Principal
Balance of the Class M-2 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $36,131,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JQ 6 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJQ68
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-2 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-2 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-2 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-2
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates and Class M-1 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-3
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1 AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-3 Original Class Certificate Principal
Balance of the Class M-3 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $9,033,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JR 4 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJR42
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-3 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-3 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-3 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-3 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-3
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-3 Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate and Class M-2 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-4
[FORM OF CLASS M-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-4
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-4 Original Class Certificate Principal
Balance of the Class M-4 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $8,603,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JS 2 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJS25
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-4 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-4 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-4 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-4 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-4 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-4
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-4 Certificates.
The Class M-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates and Class M-3
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-5
[FORM OF CLASS M-5 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3 AND CLASS M-4 CERTIFICATES AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-5
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-5 Original Class Certificate Principal
Balance of the Class M-5 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $8,603,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JT 0 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJT08
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-5 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-5 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-5 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-5 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-5 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-5 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-5 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-5
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-5 Certificates.
The Class M-5 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates and Class M-4 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-6
[FORM OF CLASS M-6 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4 AND CLASS M-5 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-6
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-6 Original Class Certificate Principal
Balance of the Class M-6 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $8,603,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JU 7 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJU70
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-6 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-6 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-6 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-6 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-6 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-6 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-6 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-6
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-6 Certificates.
The Class M-6 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-7
[FORM OF CLASS M-7 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND CLASS M-6 CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-7
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-7 Original Class Certificate Principal
Balance of the Class M-7 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $2,581,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JV 5 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJV53
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-7 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-7 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-7 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-7 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-7 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-7 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-7 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-7
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-7 Certificates.
The Class M-7 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates and Class M-6
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-8
[FORM OF CLASS M-8 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6 AND CLASS M-7
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-8
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-8 Original Class Certificate Principal
Balance of the Class M-8 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $6,022,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JW 3 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJW37
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-8 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-8 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-8 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-8 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-8 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-8 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-8 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-8
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-8 Certificates.
The Class M-8 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 and
Class M-7 Certificates as described in the Pooling and Servicing Agreement
referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT B-9
[FORM OF CLASS M-9 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
SECURITIES ADMINISTRATOR 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 SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6, CLASS M-7 AND
CLASS M-8 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS M-9
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class M-9 Original Class Certificate Principal
Balance of the Class M-9 Certificates
Certificate Interest Rate: Floating as of the Closing Date: $5,161,000.00
Date of Pooling and Servicing Agreement Initial Certificate Principal Balance:
and Cut-off Date: August 1, 2004 $[__]
Master Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: September 27,
2004
Securities Administrator: Xxxxx Fargo
No. Bank, N.A.
CUSIP: 04542B JX 1 Trustee: Deutsche Bank National Trust
Company
ISIN: US04542BJX10
Closing Date: August 26, 2004
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-9 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-9 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer, the Securities Administrator and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-9 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-9 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class M-9 Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Certificate Interest Rate for the Class M-9 Certificates for
each Distribution Date will be the least of (i) One-Month LIBOR as of the
related LIBOR Determination Date plus the Class M-9 Certificate Margin, (ii) the
Maximum Rate Cap and (iii) the Pool Cap. Interest will accrue on the Class M-9
Certificates during each Interest Accrual Period at the Certificate Interest
Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-9 Certificates.
The Class M-9 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6, Class
M-7 and Class M-8 Certificates as described in the Pooling and Servicing
Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 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 of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT C-1
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN 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") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS CE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class CE Master Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement Securities Administrator: Xxxxx Fargo
and Cut-off Date: August 1, 2004 Bank, N.A.
First Distribution Date: September 27, Trustee: Deutsche Bank National Trust
2004 Company
No.
Closing Date: August 26, 2004
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer, the Securities Administrator and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class CE Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class CE Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar, the Securities Administrator or the Trustee is obligated
to register or qualify the Class of Certificates specified on the face hereof
under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar, the Securities Administrator
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
Dated:
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT C-2
[FORM OF CLASS P CERTIFICATE]
THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS P
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class P Master Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement Securities Administrator: Xxxxx Fargo
and Cut-off Date: August 1, 2004 Bank, N.A.
First Distribution Date: September 27, Trustee: Deutsche Bank National Trust
2004 Company
No.
Closing Date: August 26, 2004
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class P Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer, the Securities Administrator and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from Prepayment Charges, Originator Prepayment Charge Payment Amounts
and Servicer Prepayment Charge Payment Amounts in the Distribution Account in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class P
Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class P Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class P Certificates are limited in right of payment to
Prepayment Charges received on the Mortgage Loans, Originator Prepayment Charge
Payment Amounts and Servicer Prepayment Charge Payment Amounts, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar, the Securities Administrator or the Trustee is obligated
to register or qualify the Class of Certificates specified on the face hereof
under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar, the Securities Administrator
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
Dated:
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT C-3
[FORM OF CLASS R CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" 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 CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) 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, (B) 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, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL
BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(d) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R
CERTIFICATE.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2004-HE1, CLASS R
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first and second lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-HE1, Class R Master Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement Securities Administrator: Xxxxx Fargo
and Cut-off Date: August 1, 2004 Bank, N.A.
First Distribution Date: September 27, Trustee: Deutsche Bank National Trust
2004 Company
No.
Closing Date: August 26, 2004
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE TRUSTEE OR ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS
NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner
of 100% Percentage Interest in that certain beneficial ownership interest
evidenced by the Class R Certificate in the Trust Fund created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Asset Backed Funding Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer, the Securities Administrator and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. 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.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in the amount required to be
distributed to the Holder of Class R Certificate on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least five Business Days prior to the Record
Date immediately prior to such Distribution Date and is the registered owner of
Class R Certificate, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class R Certificate is limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Accounts, Master Servicer Custodial
Account and Distribution Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Depositor, the Master Servicer, the Securities Administrator and the Trustee
with the consent of the Holders of Certificates entitled to the Voting Rights
identified 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 herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Securities Administrator as
provided in the Agreement, duly endorsed by, or accompanied by an assignment in
the form below or other written instrument of transfer in form satisfactory to
the Securities Administrator and the Certificate Registrar duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee, the Securities Administrator or the Certificate
Registrar, in their respective capacities as such. None of the Depositor, the
Certificate Registrar, the Securities Administrator or the Trustee is obligated
to register or qualify the Class of Certificates specified on the face hereof
under the 1933 Act or any other securities law or to take any action not
otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any such Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Certificate Registrar, the Securities Administrator
and the Master Servicer against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
No transfer of this Certificate or any interest therein may be made
to employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as two separate REMICs or cause the imposition of a tax upon
the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Securities Administrator,
the Trustee and the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Securities Administrator, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor, the Master
Servicer, the Securities Administrator, the Trustee, the Certificate Registrar
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Securities Administrator and required to be paid to
them pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund, and (ii) the purchase by the party designated
in the Agreement at a price determined as provided in the Agreement from the
Trust Fund of all Mortgage Loans and all property acquired in respect of such
Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and none of the Master Servicer, the Securities Administrator or the
Trustee assumes responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is the one of the Certificates referred to in the
within-mentioned Agreement.
Dated:
XXXXX FARGO BANK, N.A., as Certificate
Registrar
By:_____________________________________
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust)(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as ----------------
tenants in common (State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)______________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
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.
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: [CUSTODIAN]
Attn: ABFC, Series 2004-HE1
Re: Pooling and Servicing Agreement dated as of August 1, 2004 among
Asset Backed Funding Corporation, as depositor, Xxxxx Fargo Bank,
N.A., as master servicer and securities administrator, and Deutsche
Bank National Trust Company, as trustee
-------------------------------------------------------------------
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced above.
In connection with the administration of the Mortgage Loans held by
you as Custodian pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Custodian's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason:________________
By:____________________
(authorized signer)
Issuer:________________
Address:_______________
Date:__________________
Custodian
---------
[_____________________]
Please acknowledge the execution of the above request by your
signature and date below:
___________________________ ___________________
Signature Date
Documents returned to Custodian:
___________________________ ___________________
Custodian Date
EXHIBIT F-1
FORM OF CUSTODIAN'S INITIAL CERTIFICATION
Date
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 2004 among Asset Backed Funding
Corporation, as depositor, Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator, and Deutsche Bank National
Trust Company, as trustee, with respect to ABFC Asset-Backed
Certificates, Series 2004-HE1
------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
the documents listed in Section 2.01 of the Pooling and Servicing Agreement for
each Mortgage File pertaining to each [Fremont][Xxxxx Fargo] Mortgage Loan
listed on Exhibit D to the Pooling and Servicing Agreement, subject to any
exceptions noted on Schedule I hereto and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule that
corresponds to items (1), (2), (10) and (22) of the Mortgage Loan Schedule
accurately reflects the information in the Mortgage File.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
[__________________________].
as Custodian
By:__________________________________
Name:
Title:
EXHIBIT F-2
FORM OF CUSTODIAN'S FINAL CERTIFICATION
[Date]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of August 1, 2004, among Asset Backed Funding
Corporation, as depositor, Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator, and Deutsche Bank National
Trust Company, as trustee, with respect to ABFC Asset-Backed
Certificates, Series 2004-HE1
-------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that as to each
[Fremont][Xxxxx Fargo] Mortgage Loan listed in the Mortgage Loan Schedule
attached as Exhibits D to the Pooling and Servicing Agreement (other than any
Mortgage Loan paid in full or listed on Schedule I hereto), it has received the
applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.
The undersigned hereby certifies that as to each [Fremont][Xxxxx
Fargo] Mortgage Loan identified on the Mortgage Loan Schedule, other than any
Mortgage Loan listed on Schedule I hereto, it has reviewed the applicable
documents listed in Section 2.01 of the Pooling and Servicing Agreement and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
[__________________________],
as Custodian
By:_______________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Re: ABFC Asset-Backed Certificates, Series 2004-HE1
-----------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of August 1, 2004, among Asset Backed Funding Corporation, as
depositor, Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator, and Deutsche Bank National Trust Company, as trustee, we hereby
acknowledge the receipt of the original Mortgage Note, or, with respect to any
lost Mortgage Note, an original Lost Note Affidavit, together with a copy of the
related Mortgage Note (a copy of which is attached hereto as Exhibit 1) with any
exceptions thereto listed on Exhibit 2.
[_____________________].,
as Custodian
By:______________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
================================================================================
ASSET BACKED FUNDING CORPORATION
as Purchaser
and
BANK OF AMERICA, N.A.
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed Rate and Adjustable Rate Mortgage Loans
ABFC Asset-Backed Certificates, Series 2004-HE1
Dated as of August 1, 2004
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans........................................
Section 2.02 Obligations of Seller Upon Sale...............................
Section 2.03 Payment of Purchase Price for the Mortgage Loans..............
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans................................................
Section 3.02 Seller Representations and Warranties.........................
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.......................................
ARTICLE V
TERMINATION
Section 5.01 Termination...................................................
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment.....................................................
Section 6.02 Governing Law.................................................
Section 6.03 Notices.......................................................
Section 6.04 Severability of Provisions....................................
Section 6.05 Counterparts..................................................
Section 6.06 Further Agreements............................................
Section 6.07 Intention of the Parties......................................
Section 6.08 Successors and Assigns; Assignment of this Agreement..........
Section 6.09 Survival......................................................
Schedule I. - Mortgage Loan Schedule
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of August 1, 2004 (the
"Agreement"), between BANK OF AMERICA, N.A. ("Bank of America" or the "Seller")
and ASSET BACKED FUNDING CORPORATION (the "Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to (i) the Mortgage Loan Purchase and Warranties
Agreement, dated as of June 1, 2004 (the "Fremont June Sale Agreement"), by and
between Bank of America, as purchaser, and Fremont Investment & Loan
("Fremont"), as seller, (ii) the Mortgage Loan Purchase and Warranties
Agreement, dated as of July 1, 2004 (the "Fremont July Sale Agreement," and
together with the Fremont June Sale Agreement, the "Fremont Sale Agreements"),
by and between Bank of America, as purchaser and Fremont, as seller, and (iii)
the Seller's Warranties and Servicing Agreement, dated as of May 1, 2004 (the
"Xxxxx Fargo Sale Agreement," and together with the Fremont Sale Agreements, the
"Underlying Sale Agreements"), between Xxxxx Fargo Bank, N.A. ("Xxxxx Fargo
Bank," and together with Fremont, the "Originators"), as successor to Xxxxx
Fargo Home Mortgage, Inc. by merger, as seller, and Bank of America, as
purchaser, the Seller is the owner of either the notes or other evidence of
indebtedness (the "Mortgage Notes") or other evidence of ownership so indicated
on Schedule I hereto, and the other documents or instruments constituting the
Mortgage File (collectively, the "Mortgage Loans");
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (a) to any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise, and (b) to the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans;
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of August 1, 2004 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, Xxxxx Fargo Bank, N.A., as master servicer (the "Master
Servicer") and securities administrator, and Deutsche Bank National Trust
Company, as trustee (the "Trustee"), the Purchaser will convey the Mortgage
Loans to the Trustee, on behalf of the ABFC 2004-HE1 Trust (the "Trust"), the
trust created pursuant to the Pooling and Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans. The Seller does hereby agree to
and does hereby sell, assign, set over, and otherwise convey to the Purchaser,
without recourse, on the Closing Date (i) all of its right, title and interest
in and to each Mortgage Loan originated by Xxxxx Fargo Bank (the "Xxxxx Fargo
Mortgage Loans") and each Mortgage Loan originated by Fremont (the "Fremont
Mortgage Loans") and the related Cut-off Date Principal Balance thereof,
including any Related Documents; (ii) all payments on or collections in respect
of the Mortgage Loans due after the Cut-off Date; (iii) property which secured
such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iv) its interest in any insurance policies in respect of the
Mortgage Loans; (v) the rights of the Seller under the Consulting Agreement and
(vi) all proceeds of any of the foregoing.
Section 2.02 Obligations of Seller Upon Sale. (a) In connection with
any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (x) to indicate in its books and
records that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (y) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all the Mortgage Loans specifying, among
other things, for each Mortgage Loan, as of the Cut-off Date, its account number
and Cut-off Date Principal Balance. Such file (the "Mortgage Loan Schedule")
which is set forth as Exhibit D to the Pooling and Servicing Agreement, shall
also be marked as Schedule I to this Agreement and is hereby incorporated into
and made a part of this Agreement.
In connection with such transfer and assignment of the Mortgage
Loans, the Seller shall, on behalf of the Purchaser, deliver to and deposit with
the Trustee (or the custodians (each, a "Custodian") designed by the Trustee in
the Pooling and Servicing Agreement) the following documents or instruments
(with respect to each Mortgage Loan, a "Mortgage File") with respect to each
Mortgage Loan so transferred and assigned:
(i) the original Mortgage Note, endorsed in blank or with respect to
any lost Mortgage Note, a Lost Note Affidavit, together with a copy of the
related mortgage note;
(ii) with respect to the Fremont Mortgage Loans only, the original
Mortgage with evidence of recording thereon, and the original recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney, with
evidence of recording thereon or, if such Mortgage or power of attorney has been
submitted for recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a copy of such
Mortgage or power of attorney, as the case may be, certified to be a true and
complete copy of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned in blank;
(iv) with respect to the Fremont Mortgage Loans only, an original
copy of any intervening assignment of Mortgage showing a complete chain of
assignments;
(v) with respect to the Fremont Mortgage Loans only, the original or
a certified copy of the lender's title insurance policy;
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vii) any additional documents required to be delivered following a
Document Transfer Event (as defined in the Pooling and Servicing Agreement).
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the applicable Custodian on behalf of the Trustee
no later than the Closing Date, of a copy of each such 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 applicable Custodian on behalf of the Trustee, promptly upon
receipt thereof of either the original or a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy was not delivered,
with respect to the Fremont Mortgage Loans only, pursuant to Section 2.02(v)
above, the Seller shall deliver or cause to be delivered to the applicable
Custodian on behalf of the Trustee, a written commitment or interim binder or
preliminary report of title issued by the title insurance or escrow company,
with the original to be delivered to the applicable Custodian on behalf of the
Trustee, promptly upon receipt thereof. The Seller shall deliver or cause to be
delivered to the applicable Custodian on behalf of the Trustee 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.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
applicable Custodian on behalf of the Trustee (or within 90 days of the earlier
of Seller's discovery or receipt of notification if such defect would cause the
related Mortgage Loan not to be a "qualified mortgage" for REMIC purposes or
that the Mortgage Loan is defective in a manner that would cause it to be a
"defective obligation" within the meaning of Treasury regulations relating to
REMICs). If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03 of the Pooling
and Servicing Agreement.
It is understood and agreed that the obligations of the Seller set
forth in this Section 2.02 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser respecting a missing
or defective document.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing Agreement.
Section 2.03 Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Seller to the Purchaser
on the Closing Date, the Purchaser agrees (i) to pay to the Seller on the
Closing Date by transfer of immediately available funds, as directed by the
Seller, an amount equal to $[__________] and (ii) deliver to or at the direction
of the Seller on the Closing Date, the Class CE, Class P and Class R
Certificates, in respect of the Mortgage Loans (collectively, the "Purchase
Price"). The Seller shall pay, and be billed directly for, all reasonable
expenses incurred by the Purchaser in connection with the issuance of the
Certificates, including, without limitation, printing fees incurred in
connection with the prospectus relating to the Certificates, blue sky
registration fees and expenses, fees and reasonable expenses of Purchaser's
counsel, fees of the rating agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans
The representations and warranties with respect to the Fremont
Mortgage Loans relating to the Fremont June Sale Agreement were made as of June
29, 2004 and the representations and warranties with respect to the Fremont
Mortgage Loans relating to the Fremont July Sale Agreement were made as of July
29, 2004. Certain of these representations and warranties will be restated by
Fremont on August 26, 2004. The representations and warranties with respect to
the Xxxxx Fargo Mortgage Loans in the Xxxxx Fargo Sale Agreement were made as of
May 6, 2004. The Seller's right, title and interest in such representations and
warranties and the remedies in connection therewith have been assigned to the
Purchaser pursuant to (i) the Assignment, Assumption and Recognition Agreement,
dated August 26, 2004, among the Seller, the Purchaser, the Trustee, the Master
Servicer and Fremont and (ii) the Assignment, Assumption and Recognition
Agreement, dated August 26, 2004, among the Seller, the Purchaser, the Trustee,
the Master Servicer and Xxxxx Fargo Bank. To the extent that any fact, condition
or event with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of an Originator under the related Underlying Sale
Agreement and (ii) a representation or warranty of the Seller under this
Agreement (other than Sections 3.01(k) and 3.01(s) below), the only right or
remedy of the Purchaser shall be the right to enforce the obligations of the
applicable Originator under any applicable representation or warranty made by
it. The Purchaser acknowledges and agrees that the representations and
warranties of the Seller in this Section 3.01 are applicable only to facts,
conditions or events that do not constitute a breach of any representation or
warranty made by the Originators in the Underlying Sale Agreements. The Seller
shall have no obligation or liability with respect to any breach of a
representation or warranty made by it with respect to the Mortgage Loans (other
than the representations made in Sections 3.01(k) and 3.01(s) below) if the
fact, condition or event constituting such breach also constitutes a breach of a
representation or warranty made by the related Originator in the applicable
Underlying Sale Agreement, without regard to whether such Originator fulfills
its contractual obligations in respect of such representation or warranty. If,
however, Xxxxx Fargo Bank fails to reimburse the Trustee for any costs or
damages incurred by the Trust in connection with a breach of its representation
set forth in Section 3.02(i) of the Xxxxx Fargo Sale Agreement, if Fremont fails
to reimburse the Trustee for any costs or damages incurred by the Trust in
connection with a breach of Fremont's representation set forth in Sections
9.02(g) or 9.02(uu)(10) of the Fremont Sale Agreements, or if the Trust incurs
any costs or damages as a result of a breach of the Seller's representation set
forth in Section 3.01(s) below (any such costs or damages, the "Reimbursement
Amount"), the Seller shall pay the Reimbursement Amount to the Trust. The
Reimbursement Amount shall be delivered to the Master Servicer for deposit into
the Master Servicer Custodial Account within 10 days from the date the Seller
was notified by the Trustee of the amount of such costs and damages. Subject to
the foregoing, the Seller represents and warrants upon delivery of the Mortgage
Loans to the Purchaser hereunder, as to each, that:
(a) The information set forth with respect to the Mortgage Loans on
the Mortgage Loan Schedule attached hereto as Schedule I provides an accurate
listing of the Mortgage Loans, and the information with respect to each Mortgage
Loan on the Mortgage Loan Schedule is true and correct in all material respects
at the date or dates respecting which such information is given;
(b) No Mortgage Loan was 30 days or more contractually delinquent as
of the Cut-off Date. The Seller has not waived any default, breach, violation or
event of acceleration, and the Seller has not taken any action to waive any
default, breach, violation or even of acceleration, with respect to any Mortgage
Loan;
(c) There are no delinquent taxes, assessments that could become a
lien prior to the related Mortgage or insurance premiums affecting the related
Mortgaged Property;
(d) Each Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the related Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, cancellation,
subordination, recission or release;
(e) Other than any Mortgage Loan that is less than 30 days
contractually delinquent as of the Cut-off Date, there is no material default,
breach, violation or event of acceleration existing under any Mortgage or the
related Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, and neither the
Seller nor its predecessors have waived any material default, breach, violation
or event of acceleration;
(f) Each Mortgaged Property is free of material damage that would
affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(g) To the best of the Seller's knowledge, there is no proceeding
pending for the total or partial condemnation of the Mortgaged Property;
(h) Each Mortgaged Property is lawfully occupied under applicable
law; all inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of each 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, except where the failure would not have a material adverse effect
upon the related Mortgage Loan;
(i) No Mortgage Loan is in foreclosure;
(j) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G of the Code and Treas. Reg ss. 1.860G-2;
(k) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protections, all applicable predatory and abusive
lending laws, equal credit opportunity or disclosure laws applicable to the
origination of each Mortgage Loan have been complied with;
(l) No Mortgage Loan is a "high cost" loan as defined under any
federal, state or local law applicable to such Mortgage Loan at the time of its
origination;
(m) The Seller is the sole owner of record and holder of each
Mortgage Loan and the related Mortgage Note and Mortgage and each Mortgage Loan
has not been assigned or pledged, and the Seller has good and marketable title
thereto and has full right and authority to transfer and sell the Mortgage Loan
to the Purchaser. The Seller is transferring each Mortgage Loan free and clear
of any and all encumbrances, liens, pledges, equities, participation interests,
claims, agreements with other parties to sell or otherwise transfer each
Mortgage Loan, mechanics' or similar liens or claims which have been filed for
work, labor or material (and no rights are outstanding that under the law could
give rise to such liens), charges or security interests of any nature
encumbering such Mortgage Loan;
(n) With respect to each Mortgage Loan, the terms of the Mortgage
Note and Mortgage have not been impaired, waived, altered or modified in any
respect, except by a written instrument which has been recorded, if necessary,
to protect the interests of the Purchaser and maintain the lien priority of the
Mortgage and which has been delivered to the Purchaser or its designee. The
substance of any such waiver, alteration or modification has been approved by
the title insurer, to the extent required by the policy, and its terms are
reflected on the Mortgage Loan Schedule. With respect to each Mortgage Loan, no
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the title insurer, to the extent required by
the policy, and which assumption agreement is part of the Mortgage File
delivered to the Purchaser or its designee and the terms of which are reflected
on the related Mortgage Loan Schedule;
(o) With respect to each Mortgage Loan, the Seller has not dealt
with any broker, investment banker, agent or other Person (other than the
Originators and the Underwriters) who may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(p) With respect to each Mortgage Loan, the Mortgage is a valid,
subsisting enforceable and perfected first or second lien and first priority
security interest on the Mortgaged Property, including all buildings on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect to
the foregoing. With respect to each Mortgage Loan, the lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the applicable Originator and (i) referred to or to otherwise
considered in the appraisal made for the applicable Originator or (ii)
which do not adversely affect the appraised value of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
(q) Each Mortgage Loan is covered by (a) an attorney's opinion of
title and abstract of title the form and substance of which is acceptable to
Xxxxxx Xxx, (b) an ALTA lender's title insurance policy or (c) a CLTA lender's
title insurance policy or (d) another generally acceptable form of policy of
insurance issued by a title insurer qualified to do business in the jurisdiction
where the Mortgaged Property is located insuring the applicable Originator, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan subject only to the
exceptions contained in clauses (i), (ii) and (iii), and against any loss by
reason of the invalidity of unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the Mortgage Interest
Rate and Monthly Payment. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of such lender's title insurance policy. The applicable Originator, its
successors and assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in full force and effect upon the sale of the
Mortgage Loans to the Purchaser. No claims have been made under such lender's
title insurance policy, and no prior holder of the Mortgage, including the
applicable Originator or the Seller, has done anything which would impair the
coverage of such lender's title insurance policy. In connection with the
issuance of such lender's title insurance policy, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
applicable Originator or the Seller;
(r) Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with each Mortgage Loan establishes and
creates a valid, subsisting and enforceable first lien and first priority
security interest with respect to each first lien Mortgage Loan, on the property
described therein and the applicable Originator has full right to sell and
assign the same to the Purchaser. The Mortgaged Property was not, as of the date
of origination of such Mortgage Loan, subject to a mortgage, deed of trust, deed
to secure debt or other security instrument creating a lien subordinate to the
lien of the Mortgage; and
(s) No Mortgage Loan (other than a Mortgage Loan that would be
subject to the provisions of the Oakland, California or Los Angeles, California
predatory and abusive lending laws or a Mortgage Loan that is a New Jersey
covered purchase loan) is a High Cost Loan or Covered Loan, as applicable (as
such terms are defined in the then current Standard & Poor's, a division of the
XxXxxx-Xxxx Companies, Inc.'s LEVELS (R) Glossary which is now Version 5.6
Revised, Appendix E).
With respect to the representations and warranties set forth in this
Section 3.01 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Purchaser, the Master
Servicer, a Custodian, the Securities Administrator or the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan,
Prepayment Charge or the interest therein of the Purchaser or the Purchaser's
assignee, transferee or designee then, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
Upon discovery by the Seller, the Master Servicer, a Custodian, the
Securities Administrator, the Purchaser or any assignee, transferee or designee
of the Purchaser of a breach of any of the representations and warranties
contained in this Article III that materially and adversely affects the value of
any Mortgage Loan or the interest therein of the Purchaser or the Purchaser's
assignee, transferee or designee, the party discovering the breach shall give
prompt written notice to the others. Subject to the first paragraph of this
Section 3.01, within 90 days of the earlier of its discovery or its receipt of
notice of any such breach of a representation or warranty, the Seller shall
promptly cure such breach in all material respects, or in the event such breach
cannot be cured, the Seller shall repurchase the affected Mortgage Loan or cause
the removal of such Mortgage Loan from the Trust Fund and substitute for it one
or more Eligible Substitute Mortgage Loans, in either case, in accordance with
Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee (or applicable Custodian) on behalf of the Purchaser and
the Closing Date and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.01 to cure, repurchase or substitute for a Mortgage Loan
as a result of a breach of a representation or warranty, subject to the
limitation contained in the first paragraph of this Section 3.01, and to pay the
Reimbursement Amount constitute the sole remedies of the Purchaser respecting a
breach of the representations or warranties contained in this Section 3.01.
Section 3.02 Seller Representations and Warranties. The Seller
hereby represents and warrants to the Purchaser that as of the Closing Date or
as of such date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a national banking association and has the power and authority to
own its assets and to transact the business in which it is currently engaged.
The Seller is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on (i) its business,
properties, assets or condition (financial or other), (ii) the performance of
its obligations under this Agreement, (iii) the value or marketability of the
Mortgage Loans, or (iv) its ability to foreclose on the related Mortgaged
Properties.
(b) The Seller has the power and authority to make, execute, deliver
and perform this Agreement and to consummate all of the transactions
contemplated hereunder and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the Seller's legal, valid and binding
obligation enforceable in accordance with its terms, except as enforcement of
such terms may be limited by (i) bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of creditors'
rights generally or creditors of national banks and by the availability of
equitable remedies, (ii) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (iii) public
policy considerations underlying the securities laws, to the extent that such
policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities.
(c) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its business
as it is presently conducted, except for such licenses, certificates and permits
the absence of which, individually or in the aggregate, would not have a
material adverse effect on the ability of the Seller to conduct its business as
it is presently conducted. It is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations, or
registrations or declarations as shall have been obtained or filed, as the case
may be, prior to the Closing Date.
(d) The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein (i) will not conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Seller pursuant to any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument, agreement or document to which the Seller is a
party or by which it may be bound or to which any of the property or assets of
the Seller is subject, (ii) will not result in any violation of the provisions
of the charter or by-laws of the Seller, or any law, administrative regulation
or administrative or court decree applicable to the Seller and (iii) will not
require any filing or registration with or notice to or consent, approval,
authorization or order of any court or governmental authority or agency.
(e) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(f) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of any
pending insolvency.
(g) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to any
order or decree of any court, or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the Seller's condition (financial or otherwise)
or operations or any of the Seller's properties, or materially and adversely
affect the performance of any of its duties hereunder.
(h) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely, would
prohibit the Seller from entering into this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
(iii) that, if determined adversely, would prohibit or materially and adversely
affect the Seller's performance of any of its respective obligations under, or
the validity or enforceability of, this Agreement.
(i) The Seller is not transferring the Mortgage Loans to the
Purchaser hereunder with any intent to hinder, delay or defraud any of its
creditors.
(j) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(k) 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 laws or any similar statutory provisions in effect in any
applicable jurisdiction.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller .The Seller hereby covenants
that except for the transfer hereunder, the Seller will not sell, pledge, assign
or transfer to any other Person, or grant, create, incur, assume or suffer to
exist any lien on any Mortgage Loan, or any interest therein; the Seller will
notify the Trustee, as assignee of the Purchaser, of the existence of any lien
on any Mortgage Loan immediately upon discovery thereof, and the Seller will
defend the right, title and interest of the Trust, as assignee of the Purchaser,
in, to and under the Mortgage Loans, against all claims of third parties
claiming through or under the Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Mortgage Loans any liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges shall
not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE V
TERMINATION
Section 5.01 Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Article X of the Pooling and
Servicing Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended from time to
time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.
Section 6.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 6.03 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
if to the Seller:
Bank of America, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
or such other address as may hereafter be furnished to the Purchaser in
writing by the Seller.
if to the Purchaser:
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
or such other address as may hereafter be furnished to the Seller in writing
by the Purchaser.
Section 6.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 6.05 Counterparts. This Agreement may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 6.06 Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 6.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than the pledging of the Mortgage Loans by the Seller to
secure a loan by the Purchaser to the Seller. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes and all
other purposes as a sale by the Seller and a purchase by the Purchaser of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the characteristics of the Mortgage
Loans which will affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 6.08 Successors and Assigns; Assignment of this Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser and which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.
Section 6.09 Survival. The representations and warranties set forth
in Sections 3.01 and 3.02 hereof shall survive the purchase of the Mortgage
Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION,
as Purchaser
By: ___________________________________
Name: Xxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A.
as Seller
By: ___________________________________
Name: Xxxxx X. Good
Title: Vice President
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 26th day of August, 2004 before me, a Notary Public in and
for said State, personally appeared Xxxx X. Xxxxxx, known to me to be a Vice
President of Asset Backed Funding Corporation, the 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 NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 26th day of August, 2004 before me, a Notary Public in and
for said State, personally appeared Xxxxx X. Good, known to me to be a Vice
President of Bank of America, N.A., the company 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
SCHEDULE I
MORTGAGE LOAN SCHEDULE
----------------------
[INTENTIONALLY OMITTED]
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 ABFC Asset-Backed
Certificates, Series 2004-HE1, to accept the transfer of the above described
loan from Seller.
Seller agrees to indemnify and hold harmless [____________] and
Asset Backed Funding Corporation for any losses incurred by such parties
resulting from the above described promissory note has been lost or misplaced.
By:___________________________________
______________________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
________________________________
________________________________
My commission expires___________.
EXHIBIT I
FORM OF ERISA REPRESENTATION
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: ABFC Asset-Backed Certificates, Series 2004-HE1
-----------------------------------------------
Ladies and Gentlemen:
1. [The undersigned is the ______________________ of (the
"Transferee") a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.] [The undersigned,
___________________, is the transferee (the "Transferee").]
2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Asset Backed Funding
Corporation, as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator, and Deutsche Bank National Trust Company,
as trustee, no transfer of the ERISA-Restricted Certificates shall be permitted
to be made to any person unless the Depositor and the Certificate Registrar (as
defined in the Agreement) have received a certificate from such transferee in
the form hereof.
3. The Transferee either (x) (i) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or any materially similar provisions of
applicable federal, state or local law ("Similar Law"), the trustee of any such
plan or a person acting on behalf of any such plan nor a person using the assets
of any such plan or (ii) (except in the case of the Class R, Class CE and Class
P Certificates) is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of the Class R
Certificate) shall deliver to the Certificate Registrar and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Certificate
Registrar, and upon which the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such Certificate
by the Transferee will not constitute or result in a non-exempt prohibited
transaction within the meaning of ERISA or Section 4975 of the Code (or similar
provisions of Similar Law) and will not subject the Securities Administrator or
the Depositor to any obligation in addition to those undertaken by such entities
in the Pooling and Servicing Agreement, which opinion of counsel shall not be an
expense of the Securities Administrator or the Depositor.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
_______________________________________
[Transferee]
By:____________________________________
Name:
Title:
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2004-HE1 (the "Certificates"), we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (d)
we are acquiring the Certificates for investment for our own account and not
with a view to any distribution of such Certificates (but without prejudice to
our right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (e) we agree that the Certificates must be
held indefinitely by us and we acknowledge that we are able to bear the economic
risk of investment in the Certificates, (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.
Very truly yours,
[NAME OF TRANSFEREE]
By:____________________________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Re: ABFC Asset-Backed Certificates, Series 2004-HE1
-----------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2004-HE1 (the "Certificates"), we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (c)
we have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (d) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:____________________________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
-----------------
(1) Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $__________ in securities.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date:___________________________________
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
ABFC ASSET-BACKED CERTIFICATES, SERIES 2004-HE1
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 R Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Asset Backed
Funding Corporation, as depositor, Xxxxx Fargo Bank, N.A., as master servicer
and securities administrator (the "Securities Administrator"), and Deutsche Bank
National Trust Company, as trustee. Capitalized terms used, but not defined
herein shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificates either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Disqualified Organization; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, 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 not a Disqualified Organization and, at the time
of Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Disqualified Organization 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 not a Disqualified Organization 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.)
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 Securities Administrator a certificate
substantially in the form set forth in this 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 a
"noneconomic residual interest" 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, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. That the Transferee will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.
12. That, if the Transferee is purchasing the Class R Certificate in
a transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.
13. 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 or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer, duly attested, this ____ day of
__________________, 20__.
[NAME OF TRANSFEREE]
By:______________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named ____________ , known
or proved to me to be the same person who executed the foregoing instrument and
to be the ____________________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of ________ , 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day
of ________________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Check the appropriate box:
[_] The consideration paid to the Transferee to acquire the Class R Certificate
equals or exceeds the excess of (a) the present value of the anticipated tax
liabilities over (b) the present value of the anticipated savings associated
with holding such Certificate, in each case calculated in accordance with U.S.
Treasury Regulations Sections 1.860E-1(c)(7) and (8), computing present values
using a discount rate equal to the short-term Federal rate prescribed by Section
1274(d) of the Code and the compounding period used by the Transferee.
OR
[_] The transfer of the Class R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
Class R Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Class R Certificate only to
another "eligible corporation," as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), in a transaction that satisfies the
requirements of Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section
1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to it to
acquire the Class R Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment
and loss assumptions, expense and reinvestment assumptions, tax rates and
other factors specific to the Transferee) that it has determined in good
faith; and
(v) in the event of any transfer of the Class R Certificate by the
Transferee, the Transferee will require its transferee to complete a
representation in the form of this Attachment A as a condition of the
transferee's purchase of the Class R Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank, N.A.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000
Attn: Client Manager - ABFC, Series 2004-HE1
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: ABFC Asset-Backed Certificates, Series 2004-HE1
-----------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the ABFC Asset-Backed
Certificates, Series 2004-HE1 (the "Certificates"), we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, (b) we
have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of the Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of the Class R Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[____________________]
By: ______________________________
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY MASTER SERVICER
1. With respect to the Mortgage Pool, the number and Principal Balances of
all Mortgage Loans which were the subject of Principal Prepayments during
the related Prepayment Period.
2. With respect to the Mortgage Pool, the amount of all curtailments which
were received during the related Prepayment Period.
3. With respect to the Mortgage Pool, the aggregate amount of the principal
portion of all Monthly Payments received during the related Collection
Period.
4. With respect to the Mortgage Pool, the amount of interest received on the
Mortgage Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the aggregate amount of the Advances
made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the aggregate amount of the Servicing
Advances made and recovered with respect to such Distribution Date.
7. With respect to the Mortgage Pool, the delinquency and foreclosure
information and the amount of Mortgage Loan Losses during the related
Collection Period.
8. The information contained in the Liquidation Report for the related
Collection Period.
9. With respect to the Mortgage Pool, the weighted average maturity, the
weighted average Mortgage Interest Rate and the weighted average Net
Mortgage Interest Rate as of the last day of the Collection Period
preceding of the related Interest Accrual Period.
10. The Servicing Fees paid and Servicing Fees accrued during the related
Collection Period.
11. The Credit Risk Manager Fees paid and Credit Risk Manager Fees accrued
during the related Collection Period.
12. The amount of all payments or reimbursements to the Master Servicer and
the Servicers paid or to be paid since the prior Distribution Date (or in
the case of the first Distribution Date, since the Closing Date).
13. The Pool Balance.
14. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Collection
Period.
15. The aggregate interest accrued on the Mortgage Loans at their respective
Mortgage Interest Rates for the related Collection Period.
16. The amount deposited in the Master Servicer Custodial Account or
Distribution Account which may not be withdrawn therefrom pursuant to an
Order of a United States Bankruptcy Court of competent jurisdiction
imposing a stay pursuant to Section 362 of U.S. Bankruptcy Code.
17. The aggregate Realized Losses in the Mortgage Pool since the Cut-off Date
as of the end of the related Collection Period.
18. The amount of Prepayment Charges received, the amount of Originator
Prepayment Charge Payment Amounts paid, the amount of Servicer Prepayment
Charge Payment Amounts paid, and the reason for any Prepayment Charges
waived without a corresponding Servicer Prepayment Charge Payment Amount,
all for the related Collection Period.
19. The amount of Yield Maintenance Agreement Payments received with respect
to such Distribution Date.
EXHIBIT N
Form of Yield Maintenance Agreements
SWISS RE FINANCIAL PRODUCTS CORPORATION
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/Phone: (000) 000-0000/5433
DATE: August 26, 2004
TO: Xxxxx Fargo Bank, N.A., not individually, but solely as Securities
Administrator of the ABFC 2004-HE1 Trust
0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx - Corporate Trust Services - ABFC 2004-HE1
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
FROM: Swiss Re Financial Products Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
Our Reference Number: 410099-410102 - Class M Certificates
Dear Sir/Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between Xxxxx Fargo Bank, N.A., as
Securities Administrator (the "Securities Administrator") pursuant to the
Pooling and Servicing Agreement, dated as of August 1, 2004, among Asset Backed
Funding Corporation, Deutsche Bank National Trust Company and the Securities
Administrator (the "PSA"), and Swiss Re Financial Products Corporation (each a
"party" and together "the parties") on the Trade Date specified below (the
"Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992 (the "Master Agreement"), with the attached Schedule B
as the Schedule to the Master Agreement and the modifications provided below
(collectively, the "Agreement"). In the event of any inconsistency between the
provisions of the Master Agreement and this Confirmation and the attached
Schedule B, this Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and not as
agent when entering into the Transaction and in the case of Party B, it is
acting as Securities Administrator when entering into the Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own account
and, in the case of Party B, it is acting as Securities Administrator, and
in the case of both parties, it has made its own independent decisions to
enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice
from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood
that information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation
to enter into that Transaction. No communication (written or oral)
received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
the Agreement and that Transaction. It is also capable of assuming, and
assumes, the financial and other risks of the Agreement and that
Transaction.
(iv) Status of Parties. The other party is not acting as an agent, fiduciary or
advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Swiss Re Financial Products Corporation and
"Party B" means Xxxxx Fargo Bank, N.A., not individually, but solely as
Securities Administrator of the ABFC 2004-HE1 Trust.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: See Amortization Schedule, Schedule A
Trade Date: August 19, 2004
Effective Date: August 26, 2004
Termination Date: June 25, 2006, subject to adjustment
in accordance with the Following
Business Day Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: August 26, 2004
Fixed Amount: USD 145,883.00
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: Cap Rate as set forth in Schedule A.
Scale Factor: 100.00
Floating Rate Payer Period End Dates: The 25th day of each month of each
year, subject to adjustment in
accordance with the Following
Business Day Convention.
Two (2) Business Days prior to each
Floating Rate Payer Payment Dates: Floating Rate Payer Period End Date,
commencing on September 23, 2004 to
and including the Termination Date.
Floating Rate Payer Payment Amount: Notional Amount times Scale Factor
times Floating Rate Day Count
Fraction times the greater of
(a) zero and (b) the Floating Rate
Option minus the Cap Rate; provided,
however, for any Calculation Period,
if the Floating Rate Option is
greater than 6.54%, then the
Floating Rate Payer Payment Amount
for such Calculation Period shall be
6.54%.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: XXXXXX00
Account of: Swiss Re Financial Products
Account No.: 066-911184
ABA# 000000000
Account for payments to Party B: Xxxxx Fargo Bank, NA
ABA 000-000-000
Account Number: 0000000000
Account Name: Corporate Trust Clearing
FFC: 18185703, Class M Reserve Fund
5. Offices:
The Office of Party A for this
Transaction is: New York, NY
The Office of Party B for this
Transaction is: Columbia, MD
Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by responding within three (3) Business Days by returning via
telecopier an executed copy of this Confirmation to the attention of Derivative
Operations fax no. 0.000.000.0000.
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Swiss Re Financial Products Accepted and confirmed as of the date
Corporation first written:
------------------------------------,
Xxxxx Fargo Bank, N.A., not
individually, but solely as
Securities Administrator of the ABFC
2004-HE1 Trust
By: By:
------------------------------------ ---------------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- -------------------------------
SCHEDULE A to the Confirmation dated as of August 26, 2004,
Re: Reference Number 410099-410102
Between Swiss Re Financial Products Corporation and Xxxxx Fargo Bank, N.A., as
Securities Administrator, pursuant to the Pooling and Servicing Agreement, dated
as of August 1, 2004, among the Securities Administrator, Asset Backed Funding
Corporation and Deutsche Bank National Trust Company.
Amortization Schedule, subject to adjustment in accordance with the Following
Business Day Convention.
---------------------------------------------------------------------------
From and including To but excluding Notional Cap Rate
Amount (USD)
---------------------------------------------------------------------------
August 26, 2004 September 25, 2005 1,303,310.00 4.39%
September 25, 2004 October 25, 2004 1,303,310.00 4.39%
October 25, 2004 November 25, 2004 1,303,310.00 4.20%
November 25, 2004 December 25, 2004 1,303,310.00 4.39%
December 25, 2004 January 25, 2005 1,303,310.00 4.20%
January 25, 2005 February 25, 2005 1,303,310.00 4.20%
February 25, 2005 March 25, 2005 1,303,310.00 4.81%
March 25, 2005 April 25, 2005 1,303,310.00 4.20%
April 25, 2005 May 25, 2005 1,303,310.00 4.39%
May 25, 2005 June 25, 2005 1,303,310.00 4.20%
June 25, 2005 July 25, 2005 1,303,310.00 4.39%
July 25, 2005 August 25, 2005 1,303,310.00 4.20%
August 25, 2005 September 25, 2005 1,303,310.00 4.20%
September 25, 2005 October 25, 2005 1,303,310.00 4.39%
October 25, 2005 November 25, 2005 1,303,310.00 4.21%
November 25, 2005 December 25, 2005 1,303,310.00 4.40%
December 25, 2005 January 25, 2006 1,303,310.00 4.21%
January 25, 2006 February 25, 2006 1,303,310.00 4.21%
February 25, 2006 March 25, 2006 1,303,310.00 4.82%
March 25, 2006 April 25, 2006 1,303,310.00 4.90%
April 25, 2006 May 25, 2006 1,303,310.00 5.12%
May 25, 2006 June 25, 2006 1,303,310.00 6.47%
---------------------------------------------------------------------------
SCHEDULE B to the Confirmation dated as of August 26, 2004
Re: Reference Number 410099-410102
Between Swiss Re Financial Products Corporation ("Party A") and Xxxxx Fargo
Bank, N.A., as Securities Administrator ("Party B"), pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2004, (the "PSA") among the
Securities Administrator, Asset Backed Funding Corporation and Deutsche Bank
National Trust Company.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): None.
Section 5(a)(vi): None.
Section 5(a)(vii): None.
Section 5(b)(iv): None.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): None.
Section 5(a)(vi): None.
Section 5(a)(vii): None.
Section 5(b)(iv): None.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that where
there is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5),
(6) or, to the extent analogous thereto, (8), and the Defaulting Party is
governed by a system of law that does not permit termination to take place
after the occurrence of such Event of Default, then the Automatic Early
Termination provisions of Section 6(a) of the Agreement will apply.
If an Early Termination Date has occurred under Section 6(a) of the
Agreement as a result of Automatic Early Termination, and if the
Non-defaulting Party determines that it has either sustained or incurred a
loss or damage or benefited from a gain in respect of any Transaction, as
a result of movement in interest rates, currency exchange rates, other
relevant rates or market quotations between the Early Termination Date and
the date upon which the Non-defaulting Party first becomes aware that such
Event of Default has occurred under Section 6(a), then (i) the amount of
such loss or damage shall be added to the amount due by the Defaulting
Party or deducted from the amount due by the Non-defaulting Party, as the
case may be (in both cases pursuant to Section 6(e)(i)(3)) of the
Agreement; or (ii) the amount of such gain shall be deducted from the
amount due by the Defaulting Party or added to the amount due by the
Non-defaulting Party, as the case may be (in both cases pursuant to
Section 6(e)(i)(3)) of the Agreement.
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and
(ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided in Part
5(m) or in any confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the Agreement,
Party A will make the following representation and Party B will not make
the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of the Agreement by reason of material prejudice
to its legal or commercial position.
Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the following representations:
(i) Party A represents that it is a corporation organized under the laws
of the State of Delaware.
(ii) Party B represents that it is a Securities Administrator under the
PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and Party
B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
--------------------------------------------------------------------------------
Party Required to Deliver Form/Document/Certificate Date by Which
Document to be Delivered
--------------------------------------------------------------------------------
Party A and Party B Any form or document Promptly upon
required or reasonably reasonable demand by
requested to allow the the other party.
other party to make
payments under the
Agreement without any
deduction or withholding
for or on account of any
Tax, or with such
deduction or withholding
at a reduced rate.
--------------------------------------------------------------------------------
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
--------------------------------------------------------------------------------
Party required to Form/Document/or Date by which to Covered by
deliver Certificate be delivered Section 3(d)
representation
--------------------------------------------------------------------------------
Party A and Party B Certified copy of the Concurrently with Yes
Board of Directors the execution and
resolution (or delivery of the
equivalent Confirmation.
authorizing
documentation) which
sets forth the
authority of each
signatory to the
Confirmation signing
on its behalf and the
authority of such
party to enter into
Transactions
contemplated and
performance of its
obligations
hereunder.
--------------------------------------------------------------------------------
Party A and Party B Incumbency Concurrently with Yes
Certificate (or, if the execution and
available the current delivery of the
authorized signature Confirmation
book or equivalent unless previously
authorizing delivered and
documentation) still in full
specifying the names, force and effect.
titles, authority and
specimen signatures
of the persons
authorized to execute
the Confirmation
which sets forth the
specimen signatures
of each signatory to
the Confirmation
signing on its
behalf.
--------------------------------------------------------------------------------
Party A The Guaranty of Swiss Concurrently with No
Reinsurance Company the execution and
("Swiss Re") dated as delivery of the
of the date hereof, Confirmation.
issued by Swiss Re as
Party A's Credit
Support Provider (in
the form annexed
hereto as Exhibit A).
--------------------------------------------------------------------------------
Party B The PSA. Concurrently with No
the execution and
delivery of the
Confirmation.
--------------------------------------------------------------------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the Agreement:
Addresses for notices or communications to Party A and to Party B shall be
those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document: Guaranty
of Swiss Re dated as of the date hereof in the form annexed hereto as
Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: None.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws specified in the Confirmation (without reference
to choice of law doctrine other than Section 5-1401 of the New York
General Obligations Law).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall be
amended to include the following additional representations after
paragraph 3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
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 and Early Termination Event pursuant to Section 6 of
the Agreement only as a result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the Agreement with respect to Party
A as the Affected Party or Section 5(b)(iii) of the Agreement with respect
to Party A as the Burdened Party. For purposes of the Transaction to which
this Confirmation relates, Party B's only obligation under Section 2(a)(i)
of the Agreement is to pay the Fixed Amount on the Fixed Rate Payer
Payment Date.
(f) Securities Administrator Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Securities Administrator (i) this
Confirmation is executed and delivered by Xxxxx Fargo Bank, N.A., not in
its individual capacity but solely as Securities Administrator under the
PSA in the exercise of the powers and authority conferred and vested in it
thereunder and (ii) under no circumstances shall Xxxxx Fargo Bank, N.A.,
in its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
under this Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
(i) each party has given prior written consent to the party, (ii) each of
Xxxxx'x Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P") have been
provided notice of such modification and confirms in writing (including by
facsimile transmission) within five Business Days after such notice is
given that it will not downgrade, withdraw or modify its then-current
rating of the ABFC Asset-Backed Certificates, Series 2004-HE1 (the
"Securities").
(h) Proceedings.
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against, ABFC 2004-HE1
Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy, dissolution or similar law, for a period of one year and one
day following indefeasible payment in full of the Securities.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction.
(j) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third line
thereof and inserting the word "first" in place thereof.
(k) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
(l) Cooperation
Party A hereby agrees to use commercially reasonable efforts to cooperate
with Asset Backed Funding Corporation to enable Asset Backed Funding
Cooperation to timely comply with the Securities and Exchange Commission's
proposed rules regarding asset-backed securities (Release No. 33-8419), as
such rules are adopted in final form, if applicable to this Transaction.
Asset Backed Funding Corporation is an intended third party beneficiary
with respect to this provision and shall be entitled to enforce Party A's
obligations hereunder.
(m) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party
satisfactory to the Securities Administrator within (30) days of such
Ratings Event that meets or exceeds, or as to which any applicable credit
support provider meets or exceeds, the Approved Ratings Thresholds (as
defined below) on terms substantially similar to this Confirmation or (ii)
deliver collateral, in an amount equal to the Exposure (as defined below),
and an executed ISDA Credit Support Annex satisfactory to the Securities
Administrator within (30) days of such Ratings Event and subject to S&P's
and Moody's written confirmation that delivery of such collateral in the
context of such downgrade will not result in a withdrawal, qualification
or downgrade of the then current ratings assigned to the Securities. For
avoidance of doubt, a downgrade of the rating on the Securities could
occur in the event that Party A does not post sufficient collateral. For
purposes of this Transaction, a "Ratings Event" shall occur with respect
to Party A (or any applicable credit support provider), if its short-term
unsecured and unsubordinated debt ceases to be rated at least "A-1" by S&P
and at least "P-1" by Moody's (including in connection with a merger,
consolidation or other similar transaction by Party A or any applicable
credit support provider) such ratings being referred to herein as the
"Approved Ratings Thresholds," (unless, within 30 days thereafter, each of
Moody's and S&P has reconfirmed the ratings of the Securities, as
applicable, which was in effect immediately prior thereto). Only with
respect to such Ratings Event, "Exposure" shall mean the greater of the
following: (i) the xxxx-to-market value of the Transaction as of the
Valuation Date (as such term is defined in the ISDA Credit Support Annex);
(ii) the amount of the next payment due under the Transaction and (iii)
one percent of the Notional Amount for the respective Calculation Period.
(n) Additional Termination Event
Additional Termination Event will apply if a Ratings Event has occurred
and Party A has not complied with (m) 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 Additional
Termination Event.
Exhibit A
GUARANTY
To: Xxxxx Fargo Bank, N.A., (the "Beneficiary"), not individually, but solely as
Securities Administrator of the ABFC 2004-HE1 Trust - Class M Certificates (the
"Rated Security")
1. The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely and unconditionally guarantees the prompt
payment as and when due of all obligations of its indirect, wholly-owned
subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION, a Delaware corporation ("THE
GUARANTEED SUBSIDIARY") under, in connection with or ancillary to a long form
confirmation dated as of August 26, 2004 between the Beneficiary and THE
GUARANTEED SUBSIDIARY as amended or restated from time to time (the
"Agreements") which support the issuance of the Rated Security. In this
Guarantee these obligations are referred to as the "Guaranteed Obligations".
This Guarantee is given solely for the benefit of, and is enforceable only by,
the Beneficiary or any trustee as assignee of the Beneficiary to which this
Guarantee has been validly assigned in accordance with applicable law and who is
acting as trustee for the investors in the Rated Securities.
2. This Guarantee constitutes a Guarantee of payment and not of collection and
is not conditional or contingent upon any attempts to collect from, or pursue or
exhaust any rights or remedies against, THE GUARANTEED SUBSIDIARY. A demand for
payment hereunder may at the Beneficiary's option be made in writing addressed
to the Chief Financial Officer of the Guarantor. This Guarantee is not however
dependent in any way on the manner of the demand for payment. Delay in making a
claim will not affect the Guarantor's obligations under this Guarantee unless
the relevant legal limitation period has expired.
3. This Guarantee constitutes, and is intended by the Guarantor to constitute,
an unlimited non-accessory undertaking ("unbeschrankte, nicht akzessorische
Verpflichtung") within the meaning of Article 111 of the Swiss Code of
Obligations (`CO`) and is not a mere surety ("Burgschaft") within the meaning of
Article 492 et seq of the CO.
4. Notwithstanding any reference to the obligations of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guarantee are its absolute
and independent obligations as a primary obligor. Payment of a claim hereunder
is required as soon as the Guaranteed Obligations are due and payable.
5. To the extent that any event or circumstance would give rise to any legal or
equitable discharge, defence or other rights of the Guarantor under this
Guarantee, but which event or circumstance would not give rise to any discharge,
defence or other rights of THE GUARANTEED SUBSIDIARY under the Agreements, the
Guarantor hereby fully waives, subject to paragraph 7 below, such discharge,
defence, or other rights and the Guarantor's liability hereunder shall continue
as if such event or circumstance had not arisen.
6. The Guarantor further agrees, subject to paragraph 7 below, that to the
extent that any event or circumstance gives rise to any legal or equitable
discharge, defence or other rights available to both the Guarantor under the
Guarantee and THE GUARANTEED SUBSIDIARY under the Agreements, the Guarantor
hereby agrees to waive such discharge, defense or other rights against the
Beneficiary, until such time as all the Guaranteed Obligations in relation to
the same event or circumstance have been fully met as required to protect
investors in the Rated Securities.
7. Notwithstanding any other provision of this Guarantee, the Guarantor will
have the right, prior to making any payment under this Guarantee, to (a) assert
such rights of offset as are set forth in the Agreements to the extent that such
rights relate to amounts due and payable by the Beneficiary to THE GUARANTEED
SUBSIDIARY and not to amounts which are subject to dispute; and (b) defend
manifestly fraudulent claims under this Guarantee made by the Beneficiary.
8. This Guarantee will continue in full force and effect in relation to all
Guaranteed Obligations until all the Guaranteed Obligations have been satisfied
in full. For the avoidance of doubt, all Guaranteed Obligations entered into by
THE GUARANTEED SUBSIDIARY during the term of this Guarantee shall be honoured in
accordance with this Guarantee and shall be binding on the Guarantor and its
successors and assigns. This Guarantee may be amended only as necessary to
reflect changes to the Guaranteed Obligations which are validly agreed to by the
Beneficiary (or the trustee as assignee of the Beneficiary) in accordance with
the terms of the Rated Securities, including any requirement to obtain the
consent of some or all of the investors in the Rated Securities.
9. If any payment by THE GUARANTEED SUBSIDIARY is avoided, recaptured or reduced
as a result of insolvency or any similar event affecting creditors rights
generally having occurred in respect of THE GUARANTEED SUBSIDIARY, the
Guarantor`s liability under this Guarantee shall continue as if the avoided,
recaptured or reduced payment had not occurred.
10. Upon payment by the Guarantor to the Beneficiary of any amount due under
this Guarantee, the Guarantor shall be entitled to require the assignment to it
of the rights of the Beneficiary against THE GUARANTEED SUBSIDIARY to the extent
satisfied by such payment, and the Beneficiary will take at the Guarantor's
expense such steps as the Guarantor may reasonably require to implement such
assignment. The Guarantor shall not exercise any rights against THE GUARANTEED
SUBSIDIARY which it may acquire in consequence of such payment and assignment
unless and until all the Guaranteed Obligations to the Beneficiary shall have
been paid in full.
11. This Guarantee is governed and will be construed in accordance with Swiss
law. The exclusive place of jurisdiction for any legal proceeding hereunder
shall be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in
its name as of the 26th day of August, 2004.
SWISS REINSURANCE COMPANY
SWISS RE FINANCIAL PRODUCTS CORPORATION
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/Phone: (000) 000-0000/5433
DATE: August 26, 2004
TO: Xxxxx Fargo Bank, N.A., not individually, but solely as Securities
Administrator of the ABFC 2004-HE1 Trust
0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx - Corporate Trust Services - ABFC 2004-HE1
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
FROM: Swiss Re Financial Products Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Tel: 000.000.0000
Fax: 000.000.0000
Our Reference Number: 410096-410097 - Class A Certificates
Dear Sir/Madam:
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between Xxxxx Fargo Bank, N.A.,, as
Securities Administrator (the "Securities Administrator") pursuant to the
Pooling and Servicing Agreement, dated as of August 1, 2004, among Asset Backed
Funding Corporation, Deutsche Bank National Trust Company and the Securities
Administrator (the "PSA"), and Swiss Re Financial Products Corporation (each a
"party" and together "the parties") on the Trade Date specified below (the
"Transaction").
This letter agreement constitutes a "Confirmation" and the definitions and
provisions contained in the original June 2000 ISDA Definitions (the
"Definitions") as published by the International Swaps and Derivatives
Association, Inc., ("ISDA") are incorporated into this Confirmation. This
Confirmation will be governed by and subject to the terms and conditions which
would be applicable if, prior to the Trade Date, the parties had executed and
delivered an ISDA Master Agreement (Multicurrency-Cross Border), in the form
published by ISDA in 1992 (the "Master Agreement"), with the attached Schedule B
as the Schedule to the Master Agreement and the modifications provided below
(collectively, the "Agreement"). In the event of any inconsistency between the
provisions of the Master Agreement and this Confirmation and the attached
Schedule B, this Confirmation will govern.
1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, each party represents to the other party and will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):
(i) Principal. In the case of Party A, it is acting as principal and not as
agent when entering into the Transaction and in the case of Party B, it is
acting as Securities Administrator when entering into the Transaction.
(ii) Non-Reliance. In the case of Party A, it is acting for its own account
and, in the case of Party B, it is acting as Securities Administrator, and
in the case of both parties, it has made its own independent decisions to
enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice
from such advisors as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood
that information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation
to enter into that Transaction. No communication (written or oral)
received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(iii) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
the Agreement and that Transaction. It is also capable of assuming, and
assumes, the financial and other risks of the Agreement and that
Transaction.
(iv) Status of Parties. The other party is not acting as an agent, fiduciary or
advisor for it in respect of that Transaction.
In this Confirmation "Party A" means Swiss Re Financial Products Corporation and
"Party B" means Xxxxx Fargo Bank, N.A., not individually, but solely as
Securities Administrator of the ABFC 2004-HE1 Trust.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: See Amortization Schedule, Schedule A
Trade Date: August 19, 2004
Effective Date: August 26, 2004
Termination Date: June 25, 2006, subject to adjustment
in accordance with the Following
Business Day Convention.
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer Payment Date: August 26, 2004
Fixed Amount: USD 174,497.00
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate I: Cap Rate I as set forth in Schedule
A.
Cap Rate II: Cap Rate II as set forth in Schedule
A.
Scale Factor: 100.00
Floating Rate Payer Period End Dates: The 25th day of each month of each
year, subject to adjustment in
accordance with the Following
Business Day Convention.
Floating Rate Payer Payment Dates: Two (2) Business Days prior to each
Floating Rate Payer Period End Date,
commencing on September 23, 2004 to
and including the Termination Date.
Floating Rate Payer Payment Amount: Notional Amount times Scale Factor
times Floating Rate Day Count
Fraction times the greater of
(a) zero and (b) the Floating Rate
Option minus the Cap Rate I;
provided, however, for any
Calculation Period, if the Floating
Rate Option is greater than Cap Rate
II, then the Floating Rate Payer
Payment Amount for such Calculation
Period shall equal Cap Rate II.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days for payment: New York
Calculation Agent: Party A
3. Recording of Conversations
Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties, (ii) agrees to obtain any
necessary consent of, and give notice of such recording to, such personnel of
it, and (iii) agrees that recordings may be submitted in evidence in any
proceedings relating to this Agreement or any potential Transaction.
4. Account Details:
Account for payments to Party A: JPMorgan Chase Bank
SWIFT: XXXXXX00
Account of: Swiss Re Financial Products
Account No.: 066-911184
ABA# 000000000
Account for payments to Party B: Xxxxx Fargo Bank, NA
ABA 000-000-000
Account Number: 0000000000
Account Name: Corporate Trust Clearing
FFC: 18185702, Class A Reserve Fund
5. Offices:
The Office of Party A for this
Transaction is: New York, NY
The Office of Party B for this
Transaction is: Columbia, MD
Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by responding within three (3) Business Days by returning via
telecopier an executed copy of this Confirmation to the attention of Derivative
Operations fax no. 0.000.000.0000.
Failure to respond within such period shall not affect the validity or
enforceability of this Transaction, and shall be deemed to be an affirmation of
the terms and conditions contained herein, absent manifest error.
Swiss Re Financial Products Accepted and confirmed as of the date
Corporation first written:
------------------------------------,
Xxxxx Fargo Bank, N.A., not
individually, but solely as
Securities Administrator of the ABFC
2004-HE1 Trust
By: By:
------------------------------------ ---------------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
---------------------------- -------------------------------
SCHEDULE A to the Confirmation dated as of August 26, 2004,
Re: Reference Number 410096-410097
Between Swiss Re Financial Products Corporation and Xxxxx Fargo Bank, N.A., as
Securities Administrator, pursuant to the Pooling and Servicing Agreement, dated
as of August 1, 2004, among the Securities Administrator, Asset Backed Funding
Corporation and Deutsche Bank National Trust Company.
Amortization Schedule, subject to adjustment in accordance with the Following
Business Day Convention.
--------------------------------------------------------------------------------
From and including To but excluding Notional Cap Cap
Amount (USD) Rate I Rate II
--------------------------------------------------------------------------------
August 26, 2004 September 25, 2004 7,226,270.00 5.59% 7.74%
September 25, 2004 October 25, 2004 7,150,998.79 5.59% 7.74%
October 25, 2004 November 25, 2004 7,065,021.60 5.40% 7.74%
November 25, 2004 December 25, 2004 6,968,488.01 5.59% 7.74%
December 25, 2004 January 25, 2005 6,861,590.55 5.39% 7.73%
January 25, 2005 February 25, 2005 6,744,564.63 5.39% 7.73%
February 25, 2005 March 25, 2005 6,617,688.34 6.00% 7.73%
March 25, 2005 April 25, 2005 6,481,328.75 5.39% 7.73%
April 25, 2005 May 25, 2005 6,337,868.94 5.57% 7.72%
May 25, 2005 June 25, 2005 6,187,616.97 5.38% 7.72%
June 25, 2005 July 25, 2005 6,030,908.68 5.57% 7.72%
July 25, 2005 August 25, 2005 5,868,106.29 5.37% 7.71%
August 25, 2005 September 25, 2005 5,699,596.98 5.37% 7.71%
September 25, 2005 October 25, 2005 5,525,791.14 5.55% 7.70%
October 25, 2005 November 25, 2005 5,347,120.58 5.37% 7.70%
November 25, 2005 December 25, 2005 5,164,036.53 5.55% 7.69%
December 25, 2005 January 25, 2006 4,977,007.49 5.35% 7.68%
January 25, 2006 February 25, 2006 4,786,516.93 5.34% 7.67%
February 25, 2006 March 25, 2006 4,593,060.96 5.95% 7.67%
March 25, 2006 April 25, 2006 4,397,145.77 6.02% 7.66%
April 25, 2006 May 25, 2006 4,203,207.47 6.23% 7.65%
May 25, 2006 June 25, 2006 4,010,714.48 7.57% 7.64%
--------------------------------------------------------------------------------
SCHEDULE B to the Confirmation dated as of August 26, 2004
Re: Reference Number 410096-410097
Between Swiss Re Financial Products Corporation ("Party A") and Xxxxx Fargo
Bank, N.A., as Securities Administrator ("Party B"), pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2004, (the "PSA") among the
Securities Administrator, Asset Backed Funding Corporation and Deutsche Bank
National Trust Company.
Part 1. Termination Provisions.
(a) "Specified Entity" means in relation to Party A for the purpose of the
Agreement:
Section 5(a)(v): None.
Section 5(a)(vi): None.
Section 5(a)(vii): None.
Section 5(b)(iv): None.
and in relation to Party B for the purpose of the Agreement:
Section 5(a)(v): None.
Section 5(a)(vi): None.
Section 5(a)(vii): None.
Section 5(b)(iv): None.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
the Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the Agreement
will be inapplicable to Party A and Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of the
Agreement will be inapplicable to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the Agreement
will be inapplicable to Party A and Party B.
(f) The "Default Under Specified Transaction" provisions of Section 5(a)(v) of
the Agreement will be inapplicable to Party A and Party B.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the Agreement will
be inapplicable to Party A and Party B
(h) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the
Agreement will be inapplicable to Party A and Party B.
(i) The "Automatic Early Termination" provision of Section 6(a) of the
Agreement will be inapplicable to Party A and Party B; provided that where
there is an Event of Default under Section 5(a)(vii)(1), (3), (4), (5),
(6) or, to the extent analogous thereto, (8), and the Defaulting Party is
governed by a system of law that does not permit termination to take place
after the occurrence of such Event of Default, then the Automatic Early
Termination provisions of Section 6(a) of the Agreement will apply.
If an Early Termination Date has occurred under Section 6(a) of the
Agreement as a result of Automatic Early Termination, and if the
Non-defaulting Party determines that it has either sustained or incurred a
loss or damage or benefited from a gain in respect of any Transaction, as
a result of movement in interest rates, currency exchange rates, other
relevant rates or market quotations between the Early Termination Date and
the date upon which the Non-defaulting Party first becomes aware that such
Event of Default has occurred under Section 6(a), then (i) the amount of
such loss or damage shall be added to the amount due by the Defaulting
Party or deducted from the amount due by the Non-defaulting Party, as the
case may be (in both cases pursuant to Section 6(e)(i)(3) of the
Agreement); or (ii) the amount of such gain shall be deducted from the
amount due by the Defaulting Party or added to the amount due by the
Non-defaulting Party, as the case may be (in both cases pursuant to
Section 6(e)(i)(3) of the Agreement).
(j) Payments on Early Termination. For the purpose of Section 6(e) of the
Agreement:
(i) Market Quotation will apply; and (ii) The Second Method will apply.
(k) "Termination Currency" means United States Dollars.
(l) "Additional Termination Event" will not apply, except as provided in Part
5(m) or in any confirmation.
Part 2. Tax Representations.
Payer Representations. For the purpose of Section 3(e) of the Agreement,
Party A will make the following representation and Party B will not make
the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of the
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of the
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of the Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of the Agreement, provided that
it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of the Agreement by reason of material prejudice
to its legal or commercial position.
Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the following representations:
(i) Party A represents that it is a corporation organized under the laws
of the State of Delaware.
(ii) Party B represents that it is a Securities Administrator under the
PSA.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and Party
B agree to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
--------------------------------------------------------------------------------
Party Required to Deliver Form/Document/Certificate Date by Which
Document to be Delivered
--------------------------------------------------------------------------------
Party A and Party B Any form or document Promptly upon
required or reasonably reasonable demand by
requested to allow the the other party.
other party to make
payments under the
Agreement without any
deduction or withholding
for or on account of any
Tax, or with such
deduction or withholding
at a reduced rate.
--------------------------------------------------------------------------------
(b) Other documents to be delivered and covered by the Section 3(d)
representation are:--
--------------------------------------------------------------------------------
Party required to Form/Document/or Date by which to Covered by
deliver Certificate be delivered Section 3(d)
representation
--------------------------------------------------------------------------------
Party A and Party B Certified copy of the Concurrently with Yes
Board of Directors the execution and
resolution (or delivery of the
equivalent Confirmation.
authorizing
documentation) which
sets forth the
authority of each
signatory to the
Confirmation signing
on its behalf and the
authority of such
party to enter into
Transactions
contemplated and
performance of its
obligations
hereunder.
--------------------------------------------------------------------------------
Party A and Party B Incumbency Concurrently with Yes
Certificate (or, if the execution and
available the current delivery of the
authorized signature Confirmation
book or equivalent unless previously
authorizing delivered and
documentation) still in full
specifying the names, force and effect.
titles, authority and
specimen signatures
of the persons
authorized to execute
the Confirmation
which sets forth the
specimen signatures
of each signatory to
the Confirmation
signing on its
behalf.
--------------------------------------------------------------------------------
Party A The Guaranty of Swiss Concurrently with No
Reinsurance Company the execution and
("Swiss Re") dated as delivery of the
of the date hereof, Confirmation.
issued by Swiss Re as
Party A's Credit
Support Provider (in
the form annexed
hereto as Exhibit A).
--------------------------------------------------------------------------------
Party B The PSA. Concurrently with No
the execution and
delivery of the
Confirmation.
--------------------------------------------------------------------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of the Agreement:
Addresses for notices or communications to Party A and to Party B shall be
those set forth on the first page of the Confirmation.
(b) Process Agent. For the purpose of Section 13(c) of the Agreement:
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) Offices. With respect to Party A, the provisions of Section 10(a) of the
Agreement will apply.
(d) Multibranch Party. For the purpose of Section 10(c) of the Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document: Guaranty
of Swiss Re dated as of the date hereof in the form annexed hereto as
Exhibit A.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Re.
Credit Support Provider means in relation to Party B: None.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws specified in the Confirmation (without reference
to choice of law doctrine other than Section 5-1401 of the New York
General Obligations Law).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of the Agreement
will apply to the Transaction evidenced by the Confirmation.
(j) "Affiliate" will have the meaning specified in Section 14 of the
Agreement.
(k) Jurisdiction. Section 13(b) of the Agreement is hereby amended by: (i)
deleting in the second line of subparagraph (i) thereof the word "non-":
and (ii) deleting the final paragraph thereof.
Part 5. Other Provisions.
(a) Modifications to the Agreement. Section 3(a) of the Agreement shall be
amended to include the following additional representations after
paragraph 3(a)(v):
(vi) Eligible Contract Participant etc. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity Exchange
Act (7 U.S.C. 1a), as amended by the Commodity Futures Modernization Act
of 2000 and the Transaction evidenced hereby has been the subject of
individual negotiations and is intended to be exempt from, or otherwise
not subject to regulation thereunder.
(b) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any
and all rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement or any Transaction hereunder.
(c) Absence of Litigation. In Section 3(c) of the Agreement the words "or any
of its Affiliates" shall be deleted.
(d) Tax Event. In Section 5(b)(ii)(y) of the Agreement the words ", or there
is a substantial likelihood that it will," shall be deleted.
(e) Fully-paid Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement, if Party B
has satisfied its payment obligations under Section 2(a)(i) of the
Agreement, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B upon
demand of Party B any portion of such payment, (a) the occurrence of an
event described in Section 5(a) of the Agreement with respect to Party B
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 and Early Termination Event pursuant to Section 6 of
the Agreement only as a result of a Termination Event set forth in either
Section 5(b)(i) or Section 5(b)(ii) of the Agreement with respect to Party
A as the Affected Party or Section 5(b)(iii) of the Agreement with respect
to Party A as the Burdened Party. For purposes of the Transaction to which
this Confirmation relates, Party B's only obligation under Section 2(a)(i)
of the Agreement is to pay the Fixed Amount on the Fixed Rate Payer
Payment Date.
(f) Securities Administrator Capacity.
It is expressly understood and agreed by the parties hereto that insofar
as this Confirmation is executed by the Securities Administrator (i) this
Confirmation is executed and delivered by Xxxxx Fargo Bank, N.A.,, not in
its individual capacity but solely as Securities Administrator under the
PSA in the exercise of the powers and authority conferred and vested in it
thereunder and (ii) under no circumstances shall Xxxxx Fargo Bank, N.A.,
in its individual capacity be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
under this Confirmation.
(g) Transfer, Amendment and Assignment.
No transfer, amendment, waiver, supplement, assignment or other
modification of this Transaction shall be permitted by either party unless
(i) each party has given prior written consent to the party, (ii) each of
Xxxxx'x Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P") have been
provided notice of such modification and confirms in writing (including by
facsimile transmission) within five Business Days after such notice is
given that it will not downgrade, withdraw or modify its then-current
rating of the ABFC Asset-Backed Certificates, Series 2004-HE1 (the
"Securities").
(h) Proceedings.
Party A shall not institute against or cause any other person to institute
against, or join any other person in instituting against, ABFC 2004-HE1
Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy, dissolution or similar law, for a period of one year and one
day following indefeasible payment in full of the Securities.
(i) Set-off.
The provisions for Set-off set forth in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction.
(j) Amendment to ISDA Form.
The "Failure to Pay or Deliver" provision in Section 5(a)(i) of the
Agreement is hereby amended by deleting the word "third" in the third line
thereof and inserting the word "first" in place thereof.
(k) Section 1(c)
For purposes of Section 1(c) of the Agreement, this Transaction shall be
the sole Transaction under the Agreement.
(l) Cooperation
Party A hereby agrees to use commercially reasonable efforts to cooperate
with Asset Backed Funding Corporation to enable Asset Backed Funding
Cooperation to timely comply with the Securities and Exchange Commission's
proposed rules regarding asset-backed securities (Release No. 33-8419), as
such rules are adopted in final form, if applicable to this Transaction.
Asset Backed Funding Corporation is an intended third party beneficiary
with respect to this provision and shall be entitled to enforce Party A's
obligations hereunder.
(m) Rating Agency Downgrade
If a Ratings Event (as defined below) occurs with respect to Party A (or
any applicable credit support provider), then Party A shall at its own
expense, (i) assign this Transaction hereunder to a third party
satisfactory to the Securities Administrator within (30) days of such
Ratings Event that meets or exceeds, or as to which any applicable credit
support provider meets or exceeds, the Approved Ratings Thresholds (as
defined below) on terms substantially similar to this Confirmation or (ii)
deliver collateral, in an amount equal to the Exposure (as defined below),
and an executed ISDA Credit Support Annex satisfactory to the Securities
Administrator within (30) days of such Ratings Event and subject to S&P's
and Xxxxx'x written confirmation that delivery of such collateral in the
context of such downgrade will not result in a withdrawal, qualification
or downgrade of the then current ratings assigned to the Securities. For
avoidance of doubt, a downgrade of the rating on the Securities could
occur in the event that Party A does not post sufficient collateral. For
purposes of this Transaction, a "Ratings Event" shall occur with respect
to Party A (or any applicable credit support provider), if its short-term
unsecured and unsubordinated debt ceases to be rated at least "A-1" by S&P
and at least "P-1" by Xxxxx'x (including in connection with a merger,
consolidation or other similar transaction by Party A or any applicable
credit support provider) such ratings being referred to herein as the
"Approved Ratings Thresholds," (unless, within 30 days thereafter, each of
Xxxxx'x and S&P has reconfirmed the ratings of the Securities, as
applicable, which was in effect immediately prior thereto). Only with
respect to such Ratings Event, "Exposure" shall mean the greater of the
following: (i) the xxxx-to-market value of the Transaction as of the
Valuation Date (as such term is defined in the ISDA Credit Support Annex);
(ii) the amount of the next payment due under the Transaction and (iii)
one percent of the Notional Amount for the respective Calculation Period.
(n) Additional Termination Event
Additional Termination Event will apply if a Ratings Event has occurred
and Party A has not complied with (m) 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 Additional
Termination Event.
Exhibit A
GUARANTY
To: Xxxxx Fargo Bank, N.A.,, (the "Beneficiary"), not individually, but solely
as Securities Administrator of the ABFC 2004-HE1 Trust - Class A Certificates
(the "Rated Security")
1. The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely and unconditionally guarantees the prompt
payment as and when due of all obligations of its indirect, wholly-owned
subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION, a Delaware corporation ("THE
GUARANTEED SUBSIDIARY") under, in connection with or ancillary to a long form
confirmation dated as of August 26, 2004 between the Beneficiary and THE
GUARANTEED SUBSIDIARY as amended or restated from time to time (the
"Agreements") which support the issuance of the Rated Security. In this
Guarantee these obligations are referred to as the "Guaranteed Obligations".
This Guarantee is given solely for the benefit of, and is enforceable only by,
the Beneficiary or any trustee as assignee of the Beneficiary to which this
Guarantee has been validly assigned in accordance with applicable law and who is
acting as trustee for the investors in the Rated Securities.
2. This Guarantee constitutes a Guarantee of payment and not of collection and
is not conditional or contingent upon any attempts to collect from, or pursue or
exhaust any rights or remedies against, THE GUARANTEED SUBSIDIARY. A demand for
payment hereunder may at the Beneficiary's option be made in writing addressed
to the Chief Financial Officer of the Guarantor. This Guarantee is not however
dependent in any way on the manner of the demand for payment. Delay in making a
claim will not affect the Guarantor's obligations under this Guarantee unless
the relevant legal limitation period has expired.
3. This Guarantee constitutes, and is intended by the Guarantor to constitute,
an unlimited non-accessory undertaking ("unbeschrankte, nicht akzessorische
Verpflichtung") within the meaning of Article 111 of the Swiss Code of
Obligations (`CO`) and is not a mere surety ("Burgschaft") within the meaning of
Article 492 et seq of the CO.
4. Notwithstanding any reference to the obligations of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guarantee are its absolute
and independent obligations as a primary obligor. Payment of a claim hereunder
is required as soon as the Guaranteed Obligations are due and payable.
5. To the extent that any event or circumstance would give rise to any legal or
equitable discharge, defence or other rights of the Guarantor under this
Guarantee, but which event or circumstance would not give rise to any discharge,
defence or other rights of THE GUARANTEED SUBSIDIARY under the Agreements, the
Guarantor hereby fully waives, subject to paragraph 7 below, such discharge,
defence, or other rights and the Guarantor's liability hereunder shall continue
as if such event or circumstance had not arisen.
6. The Guarantor further agrees, subject to paragraph 7 below, that to the
extent that any event or circumstance gives rise to any legal or equitable
discharge, defence or other rights available to both the Guarantor under the
Guarantee and THE GUARANTEED SUBSIDIARY under the Agreements, the Guarantor
hereby agrees to waive such discharge, defense or other rights against the
Beneficiary, until such time as all the Guaranteed Obligations in relation to
the same event or circumstance have been fully met as required to protect
investors in the Rated Securities.
7. Notwithstanding any other provision of this Guarantee, the Guarantor will
have the right, prior to making any payment under this Guarantee, to (a) assert
such rights of offset as are set forth in the Agreements to the extent that such
rights relate to amounts due and payable by the Beneficiary to THE GUARANTEED
SUBSIDIARY and not to amounts which are subject to dispute; and (b) defend
manifestly fraudulent claims under this Guarantee made by the Beneficiary.
8. This Guarantee will continue in full force and effect in relation to all
Guaranteed Obligations until all the Guaranteed Obligations have been satisfied
in full. For the avoidance of doubt, all Guaranteed Obligations entered into by
THE GUARANTEED SUBSIDIARY during the term of this Guarantee shall be honoured in
accordance with this Guarantee and shall be binding on the Guarantor and its
successors and assigns. This Guarantee may be amended only as necessary to
reflect changes to the Guaranteed Obligations which are validly agreed to by the
Beneficiary (or the trustee as assignee of the Beneficiary) in accordance with
the terms of the Rated Securities, including any requirement to obtain the
consent of some or all of the investors in the Rated Securities.
9. If any payment by THE GUARANTEED SUBSIDIARY is avoided, recaptured or reduced
as a result of insolvency or any similar event affecting creditors rights
generally having occurred in respect of THE GUARANTEED SUBSIDIARY, the
Guarantor`s liability under this Guarantee shall continue as if the avoided,
recaptured or reduced payment had not occurred.
10. Upon payment by the Guarantor to the Beneficiary of any amount due under
this Guarantee, the Guarantor shall be entitled to require the assignment to it
of the rights of the Beneficiary against THE GUARANTEED SUBSIDIARY to the extent
satisfied by such payment, and the Beneficiary will take at the Guarantor's
expense such steps as the Guarantor may reasonably require to implement such
assignment. The Guarantor shall not exercise any rights against THE GUARANTEED
SUBSIDIARY which it may acquire in consequence of such payment and assignment
unless and until all the Guaranteed Obligations to the Beneficiary shall have
been paid in full.
11. This Guarantee is governed and will be construed in accordance with Swiss
law. The exclusive place of jurisdiction for any legal proceeding hereunder
shall be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in
its name as of the 26th day of August, 2004.
SWISS REINSURANCE COMPANY
EXHIBIT O
Form of Certification
ABFC 2004-HE1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2004-HE1
I, [identify the certifying individual] certify that:
1. I have reviewed the annual report on Form 10-K, and all Monthly Form 8-K's
containing Distribution Date Statements filed in respect of periods
included in the year covered by this annual report, of the ABFC 2004-HE1
Trust;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the Securities Administrator by the Master
Servicer under the Pooling and Servicing Agreement, dated as of August
1, 2004 (the "Agreement"), among Asset Backed Funding Corporation, as
depositor, Xxxxx Fargo Bank, N.A., as master servicer (the "Master
Servicer") and securities administrator (the "Securities
Administrator"), and Deutsche Bank National Trust Company, as trustee,
for inclusion in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Agreement and based upon my knowledge and the annual
compliance review required under the Agreement, and except as disclosed in
the reports, the Master Servicer has fulfilled its obligations under the
Agreement;
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports; and
6. In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Fremont
Investment & Loan and HomEq Servicing Corporation.
By:____________________________________
Name:
Title:
EXHIBIT P
Form of Certification to be Provided
by the Securities Administrator to the Master Servicer
ABFC 2004-HE1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2004-HE1
I, [identify the certifying individual], certify to Xxxxx Fargo Bank, N.A.
and its officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year [___]
and all Monthly Form 8-K's containing Distribution Date Statements filed
in respect of periods included in the year covered by that annual report,
of the ABFC 2004-HE1 Trust;
2. Based on my knowledge, the distribution information in the Distribution
Date Statements contained in all Monthly Form 8-K's included in the
year covered by the annual report on Form 10-K for the calendar year
[___], taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period
covered by that annual report; and
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Securities Administrator by the Master Servicer
under the Pooling and Servicing Agreement, dated as of August 1, 2004,
among Asset Backed Funding Corporation, as depositor, Xxxxx Fargo Bank,
N.A., as master servicer and securities administrator, and Deutsche Bank
National Trust Company, as trustee, for inclusion in these reports is
included in these reports.
XXXXX FARGO BANK, N.A., as Securities
Administrator
By:______________________________________
Name:
Title:
Schedule I
