EXHIBIT 4.1
5
EXECUTION COPY
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X.X. XXXXXX ACCEPTANCE CORPORATION I,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
XXXXXX LOAN SERVICING LP,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 2004
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms...................................................................................................6
Section 1.02 Accounting.....................................................................................................45
Section 1.03 Allocation of Certain Interest Shortfalls......................................................................45
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans...................................................................................46
Section 2.02 Acceptance by the Trustee......................................................................................48
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller.....................................................49
Section 2.04 Representations and Warranties of the Seller with Respect to the Mortgage Loans................................52
Section 2.05 Representations, Warranties and Covenants of the Servicer......................................................53
Section 2.06 Representations and Warranties of the Depositor................................................................55
Section 2.07 Representations and Warranties of the Seller...................................................................57
Section 2.08 Covenants of the Seller........................................................................................58
Section 2.09 Conveyance of REMIC 1 Regular Interests and Acceptance of REMIC 1 by the Trustee; Issuance of
Certificates...................................................................................................59
Section 2.10 Conveyance of Class B-2 Interest and Acceptance of REMIC 3 by the Trustee; Issuance of the Class B-2
Certificates...................................................................................................60
Section 2.11 Conveyance of Class B-3 Interest and Acceptance of REMIC 4 by the Trustee; Issuance of the Class B-3
Certificates...................................................................................................60
Section 2.12 Conveyance of Class B-4 Interest and Acceptance of REMIC 5 by the Trustee; Issuance of the Class B-4
Certificates...................................................................................................61
Section 2.13 Conveyance of Class X/N Interest and Acceptance of REMIC 6 by the Trustee; Issuance of the Class X/N
Certificates...................................................................................................61
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer....................................................................................62
Section 3.02 Collection of Mortgage Loan Payments...........................................................................64
Section 3.03 Realization Upon Defaulted Mortgage Loans......................................................................64
Section 3.04 Collection Account and Distribution Account....................................................................65
Section 3.05 Permitted Withdrawals From the Collection Account..............................................................67
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts..................................................68
i
Section 3.07 Permitted Withdrawals from Escrow Account......................................................................68
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder..........................................69
Section 3.09 Transfer of Accounts...........................................................................................70
Section 3.10 Maintenance of Hazard Insurance................................................................................70
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy............................................................71
Section 3.12 Fidelity Bond, Errors and Omissions Insurance..................................................................71
Section 3.13 Title, Management and Disposition of REO Property..............................................................72
Section 3.14 Due-On-Sale Clauses; Assumption and Substitution Agreements....................................................73
Section 3.15 Notification of Adjustments....................................................................................74
Section 3.16 Optional Purchases of Mortgage Loans by Servicer...............................................................75
Section 3.17 Trustee to Cooperate; Release of Files.........................................................................75
Section 3.18 Servicing Compensation.........................................................................................76
Section 3.19 Statement as to Compliance.....................................................................................77
Section 3.20 Annual Independent Certified Public Accountants' Reports.......................................................77
Section 3.21 Access to Certain Documentation and Information Regarding the Mortgage Loans...................................78
Section 3.22 Commission Reporting...........................................................................................78
Section 3.23 Obligations of the Servicer in Respect of Compensating Interest................................................80
Section 3.24 Obligations of the Servicer in Respect of Mortgage Interest Rates and Monthly Payments.........................80
Section 3.25 Investment of Funds in the Collection Account and the Distribution Account.....................................80
Section 3.26 Liability of Servicer; Indemnification.........................................................................81
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties.................................................82
Section 3.28 Protection of Assets...........................................................................................83
Section 3.29 LIBOR Carryover Reserve Account................................................................................83
Section 3.30 Advance Facility...............................................................................................84
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.........................................................................................86
Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts.................................................87
Section 4.03 Allocation of Losses...........................................................................................92
Section 4.04 Method of Distribution.........................................................................................93
Section 4.05 Distributions on Book-Entry Certificates.......................................................................93
Section 4.06 Statements.....................................................................................................93
Section 4.07 Remittance Reports; Advances...................................................................................96
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...............................................................................................98
Section 5.02 Registration of Transfer and Exchange of Certificates..........................................................98
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................................................103
ii
Section 5.04 Persons Deemed Owners.........................................................................................104
Section 5.05 Appointment of Paying Agent...................................................................................104
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Seller, the Servicer and the Depositor.......................................................105
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Seller, the Servicer or the
Depositor.....................................................................................................105
Section 6.03 Limitation on Liability of the Servicer and Others............................................................105
Section 6.04 Servicer Not to Resign........................................................................................106
Section 6.05 Delegation of Duties..........................................................................................107
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination................................................................................107
Section 7.02 Trustee to Act; Appointment of Successor......................................................................109
Section 7.03 Waiver of Defaults............................................................................................110
Section 7.04 Notification to Certificateholders............................................................................110
Section 7.05 Survivability of Servicer Liabilities.........................................................................110
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.............................................................................................111
Section 8.02 Certain Matters Affecting the Trustee.........................................................................112
Section 8.03 Trustee not Liable for Certificates or Mortgage Loans.........................................................113
Section 8.04 Trustee May Own Certificates..................................................................................114
Section 8.05 Seller to Pay Trustee Fees and Expenses.......................................................................114
Section 8.06 Eligibility Requirements for Trustee..........................................................................115
Section 8.07 Resignation or Removal of Trustee.............................................................................116
Section 8.08 Successor Trustee.............................................................................................116
Section 8.09 Merger or Consolidation of Trustee............................................................................117
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................................117
Section 8.11 Limitation of Liability.......................................................................................118
Section 8.12 Trustee May Enforce Claims Without Possession of Certificates.................................................118
Section 8.13 Suits for Enforcement.........................................................................................119
Section 8.14 Waiver of Bond Requirement....................................................................................119
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.....................................................119
Section 8.16 Compliance with National Housing Act of 1934..................................................................119
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ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration..........................................................................................120
Section 9.02 Prohibited Transactions and Activities........................................................................123
Section 9.03 Indemnification With Respect to Certain Taxes and Loss of REMIC Status........................................123
ARTICLE X
TERMINATION
Section 10.01 Termination...................................................................................................124
Section 10.02 Additional Termination Requirements...........................................................................125
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.....................................................................................................126
Section 11.02 Recordation of Agreement; Counterparts........................................................................127
Section 11.03 Limitation on Rights of Certificateholders....................................................................128
Section 11.04 Governing Law; Jurisdiction...................................................................................129
Section 11.05 Notices.......................................................................................................129
Section 11.06 Severability of Provisions....................................................................................129
Section 11.07 Article and Section References................................................................................130
Section 11.08 Notice to the Rating Agencies.................................................................................130
Section 11.09 Further Assurances............................................................................................131
Section 11.10 Benefits of Agreement.........................................................................................131
Section 11.11 Acts of Certificateholders....................................................................................131
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 A-4 Form of Class A-4 Certificates
Exhibit A-5 Form of Class A-5 Certificates
Exhibit A-6 Form of Class A-6 Certificates
Exhibit B-1 Form of Class B-1 Certificates
Exhibit B-2 Form of Class B-2 Certificates
Exhibit B-3 Form of Class B-3 Certificates
Exhibit B-4 Form of Class B-4 Certificates
Exhibit C-1-1 Form of Class R Certificates
Exhibit C-1-2 Form of Class R-X Certificates
Exhibit C-2 Form of Class M-1 Certificates
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Exhibit C-3 Form of Class M-2 Certificates
Exhibit C-4 Form of Class M-3 Certificates
Exhibit C-5 Form of Class X Certificates
Exhibit C-6 Form of Class N Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's or Custodian's Initial Certification
Exhibit F-2 Form of Trustee's or Custodian's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J-1 Form of Investment Letter [Non-Rule 144A]
Exhibit J-2 Form of Investment Letter [Rule 144A]
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Servicer
Exhibit N Form of Officer's Certificate with Respect to Prepayments
Exhibit O-1 Form of Certification to Be Provided by the Servicer with Form 10-K
Exhibit O-2 Form of Certification to Be Provided to the Servicer by the Trustee
Exhibit P Form of Power of Attorney
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This Pooling and Servicing Agreement is dated as of June 1, 2004
(the "Agreement"), among X.X. XXXXXX ACCEPTANCE CORPORATION I, as depositor
(the "Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as
seller (the "Seller"), XXXXXX LOAN SERVICING LP, as servicer (the "Servicer")
and U.S. BANK NATIONAL ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple
Classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Trust Fund created hereunder. The Certificates will consist of
seventeen Classes of Certificates, designated as (i) the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the
Class A-4 Certificates, the Class A-5 Certificates and the Class A-6
Certificates, (ii) the Class M-1 Certificates, Class M-2 Certificates and the
Class M-3 Certificates, (iii) the Class B-1 Certificates, the Class B-2
Certificates, the Class B-3 Certificates and the Class B-4 Certificates, (iv)
the Class N Certificates, (v) the Class X Certificates and (vi) the Class R
Certificates and the Class R-X Certificates. Each REMIC regular interest
created hereby will be retired on or before May 25, 2035 (the "Assumed Final
Rate Maturity Date").
REMIC 1
-------
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the LIBOR Carryover
Reserve Account) as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 1." The Class R-1 Interest will represent the sole class
of "residual interests" in REMIC 1 for purposes of the REMIC Provisions under
federal income tax law. The REMIC 1 Regular Interests will have the Initial
Principal Amounts, Pass-Through Rates and Corresponding Certificates as set
forth in the following table:
Initial Principal Pass-Through Corresponding
REMIC 1 Interests Amount(1) Rate Certificates
----------------- --------- ---- ------------
I-A-1 (1) (2) A-1
I-A-2 (1) (2) A-2
I-A-3 (1) (2) A-3
I-A-4 (1) (2) A-4
I-A-5 (1) (2) A-5
I-A-6 (1) (2) A-6
I-M-1 (1) (2) M-1
I-M-2 (1) (2) M-2
I-M-3 (1) (2) M-3
I-B-1 (1) (2) B-1
I-B-2 (1) (2) B-2
I-B-3 (1) (2) B-3
I-B-4 (1) (2) B-4
I-Accrual(3) (1) (2) N/A
R-1 (4) (4) N/A
-------------------------
(1) On each Distribution Date, distributions of principal and Realized
Losses will be allocated to the REMIC 1 Interests in such a manner that,
following such allocations: (i) their principal balances will equal 50%
of the Certificate Balance of their Corresponding Certificates for such
Distribution Date, and (ii) the Class I-Accrual Interest will have a
principal balance equal to 50% of the aggregate of the Stated Principal
Balances of the Mortgage Loans plus 100% of the Overcollateralization
Amount.
(2) The weighted average of the Net Mortgage Interest Rate of the Mortgage
Loans.
(3) The Class I-Accrual Interest will be entitled to all Prepayment
Penalties collected in respect of the Mortgage Loans.
(4) The Class R-1 Interest is the sole class of residual interest in REMIC 1.
It has no principal balance and pays no principal or interest.
REMIC 2
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 2." The Class R-2 Interest represents the sole class
of "residual interests" in REMIC 2 for purposes of the REMIC Provisions. The
following table sets forth the Class designation, Pass-Through Rate and
Original Class Certificate Principal Balance for each Class of Certificates
that represents one or more of the "regular interests" in REMIC 2 created
hereunder:
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
-------------------------- ------------------- ---------------------
Class A-1 Variable(1) $165,800,000
Class A-2 Variable(1) $20,700,000
Class A-3 Variable(1) $54,600,000
Class A-4 Variable(1) $32,300,000
Class A-5 Variable(1) $24,583,000
Class A-6 Variable(1) $33,100,000
Class M-1 Variable(1) $17,800,000
Class M-2 Variable(1) $15,822,000
Class M-3 Variable (1) $3,956,000
Class B-1 Variable(1) $3,956,000
Class B-2 Variable(1) $2,000,000
Class B-2 Interest Variable(1) $1,956,000
Class B-3 Interest Variable(1) $3,956,000
Class B-4 Interest Variable(1) $3,758,000
Class X/N Interest Variable(2) $14,600,000
Class R (3) N/A
-------------------------
(1) Calculated in accordance with the definition of "Pass-Through Rate"
herein.
2
(2) The Class X/N Interest will accrue interest at its variable Pass-Through
Rate on the Notional Amount of the Class X/N Interest outstanding
from time to time which shall equal the aggregate of the Uncertificated
Principal Balances of the REMIC 1 Regular Interests. The Class X/N Interest
will not accrue interest on its Class Certificate Principal Balance. The
Class X/N Certificates also will be entitled to all Prepayment Penalties
collected in respect of the Mortgage Loans.
(3)(4) The Class R Certificates will represent the beneficial ownership of the
Class R-1 and Class R-2 Interests.
The Class B-2 REMIC
-------------------
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class B-2 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "the Class B-2 REMIC" or "REMIC 3." The Class R-3 Interest
represents the sole class of "residual interests" in the Class B-2 REMIC for
purposes of the REMIC Provisions. The following table sets forth the Class
designation, Pass-Through Rate and Original Class Certificate Principal
Balance for the Class of Certificates that represent the "regular interest" in
the Class B-2 REMIC created hereunder:
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
--------------------------- -------------------- ---------------------
Class B-2................. Variable(1) $3,956,000
-------------------------
(1) The Class B-2 Certificates will receive 100% of amounts received in
respect of the Class B-2 Interest.
The Class B-3 REMIC
-------------------
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class B-3 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "the Class B-3 REMIC" or "REMIC 4". The Class R-4 Interest
represents the sole class of "residual interests" in the Class B-3 REMIC for
purposes of the REMIC Provisions. The following table sets forth the Class
designation, Pass-Through Rate and Original Class Certificate Principal
Balance for the Class of Certificates that represent the "regular interest" in
the Class B-3 REMIC created hereunder:
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
------------------------- -------------------- ----------------------
Class B-3.............. Variable(1) $3,956,000.00
-------------------------
(1) The Class B-3 Certificates will receive 100% of amounts received in
respect of the Class B-3 Interest.
The Class B-4 REMIC
-------------------
3
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class B-4 Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "the Class B-4 REMIC" or "REMIC 5". The Class R-5 Interest
represents the sole class of "residual interests" in The Class B-4 REMIC for
purposes of the REMIC Provisions. The following table sets forth the Class
designation, Pass-Through Rate and Original Class Certificate Principal
Balance for the Class of Certificates that represent the "regular interest" in
The Class B-4 REMIC created hereunder:
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
------------------------- ------------------ ---------------------
Class B-4.............. Variable(1) $3,758,000.00
-------------------------
(1) The Class B-4 Certificates will receive 100% of amounts received in
respect of the Class B-4 Interest.
The Class X/N REMIC
-------------------
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the Class X/N Interest as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as "the Class X/N REMIC" or "REMIC 6". The Class R-6 Interest
represents the sole class of "residual interests" in the Class X/N REMIC for
purposes of the REMIC Provisions. The following table sets forth (or
describes) the Class designation, Pass-Through Rate and Original Class
Certificate Principal Balance for the Class of Certificates that represent the
"regular interest" in the Class X/N REMIC created hereunder:
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
------------------------ ------------------- ---------------------
Class X/N............. Variable(1) $14,600,000
-------------------------
(1) The Class X/N Certificates will receive 100% of amounts received in respect
of the Class X/N Interest.
In addition to the above Certificates, the Trust Fund shall issue
two additional Classes of Certificates, designated as the Class N Certificates
and the Class X Certificates. For federal income tax purposes, in the event
that the beneficial ownership of the Class N Certificates and the Class X
Certificates is held by different investors for tax purposes, the Trustee
shall treat each such class of Certificates as representing the beneficial
interest in a partnership whose sole asset is a the single regular interest
issued by the Class X/N REMIC. In the event that the beneficial ownership of
the Class N Certificates and the Class X Certificates is held by the same
investor, the Trustee shall treat the Class N Certificates as not having been
issued for federal income tax purposes so that the entire economic entitlement
of the Class N Certificates and Class X Certificates will represent a "regular
interest" in the Class X/N REMIC.
4
The following table irrevocably sets forth the designation, the Pass-Through
Rate, the Notional Amount for the Class N Certificates and the Class X
Certificates.
Original Class
Pass-Through Certificate Principal
Class Designation Rate Balance
------------------- -------------------- ------------------------
Class N........... 10.00% per annum $23,750,000.00
Class X........... Variable(1) N/A
-------------------------
(1) The Class X Certificates are entitled to all amounts remaining
following distributions on the Class N Certificates in accordance with
Section 4.02(B)(xxv).
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest
on the Floating Rate Certificates will be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day
year. Interest on the Class N Certificates and the Class X Certificates will
be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to which
any portion of a Monthly Payment is, as of the last day of the prior
Collection Period, two months or more past due, each Mortgage Loan in
foreclosure, all REO Property and each Mortgage Loan for which the Mortgagor
has filed for bankruptcy after the Closing Date.
"Account": Either the Collection Account or the Distribution
Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and each Class of Certificates and the Class B-2 Interest, the Class B-3
Interest, the Class B-4 Interest and the Class X/N Interest, an amount equal
to the interest accrued at the applicable rate set forth or described opposite
such Class in the table in the Preliminary Statement during the related
Interest Accrual Period on the Certificate Principal Balance (or Notional
Amount) of such Class immediately prior to such Distribution Date, reduced by
such Class's Interest Percentage of Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls for such Distribution Date allocated to such
Certificates as provided in Section 1.03 hereof.
"Actuarial Mortgage Loan": Any Mortgage Loan other than a Simple
Interest Mortgage Loan.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on an Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"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 may change pursuant to the related Mortgage
Note. The first Adjustment Date following the Cut-off Date as to each
Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Actuarial Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Distribution Date pursuant to
Section 4.07.
"Advance Facility": As defined in Section 3.30 hereof.
6
"Advance Facility Notice": As defined in Section 3.30 hereof.
"Advance Financing Person": As defined in Section 3.30 hereof.
"Advance Reimbursement Amounts": As defined in Section 3.30 hereof.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise and "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto,
including with respect to each FHA Loan, the FHA Regulations and the related
FHA Insurance Contract.
"Applied Realized Loss Amount": With respect to each Distribution
Date, the sum (without duplication) of (1) the excess, if any, of (a) the
aggregate Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates (after giving effect to all distributions on such
Distribution Date) over (b) the Pool Balance as of the end of the related
Collection Period, plus (2) Special Hazard Losses allocated pursuant to
Section 4.03(b).
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due
during the related Collection Period and received by the Trustee one Business
Day prior to the related Distribution Date, (b) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments, Subsequent Recoveries, 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) in respect of the Mortgage Loans
during the related Prepayment Period, (c) the aggregate of any amounts
received in respect of an REO Property withdrawn from any REO Account and
deposited in the Collection Account for such Distribution Date, (d) any
Compensating Interest for such Distribution Date, and (e) the aggregate of any
Advances made by the Servicer for such Distribution Date over (ii) the sum of
(a) amounts reimbursable or payable to the Servicer pursuant to Section 3.05,
(b) Stayed Funds, (c) the Servicing Fee and (d) amounts deposited in the
Collection Account or the Distribution Account, as the case may be, in error.
7
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater
than the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance of
a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that
is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the
Closing Date, the Class A Certificates and the Mezzanine Certificates shall be
Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, the State of New York,
the State of Texas or in the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
"Certificate": Any Regular Certificate, Class N Certificate, Class X
Certificate or Residual Certificate.
"Certificate Custodian": Initially, U.S. Bank National Association;
thereafter any other Certificate Custodian acceptable to the Depository and
selected by the Trustee.
"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 N, Class X and Residual Certificates) and
any Distribution Date, the Original Class Certificate Principal Balance,
reduced by the sum of (i) all amounts actually distributed in respect of
principal of such Class on all prior Distribution Dates (taking into account
any increases in the Certificate Principal Balance thereof due to the receipt
of any Subsequent Recoveries as provided in Section 4.02) and (ii) Applied
Realized Loss Amounts allocated thereto. The Class N, Class X and Residual
Certificates do not have a Certificate Principal Balance. With respect to any
Certificate (other than a Class N, Class X or a Residual Certificate) of a
Class and any Distribution Date, the portion of the Certificate Principal
Balance of such Class represented by such Certificate equal to the product of
the Percentage Interest evidenced by such Certificate and the Certificate
Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
8
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a
Residual Certificate for any purpose hereof.
"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 Certificate": Any one of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class A-5 Certificates or the Class A-6 Certificates.
"Class A-1 Certificate": Any one of the Certificates with an "A-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class A-1 Certificate Margin": For each Distribution Date (i) prior
to the Optional Termination Date, 0.170% per annum, and (ii) on or after the
Optional Termination Date, 0.340% per annum.
"Class A-1 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-1 Certificates for
such Distribution Date.
"Class A-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) LIBOR as of the related LIBOR Determination Date, plus the Class
A-1 Certificate Margin and (ii) the related Rate Cap for such Distribution
Date.
"Class A-2 Certificate": Any one of the Certificates with an "A-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class A-2 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 1.490% per annum, and (ii) on or after the Optional
Termination Date, 1.990% per annum.
"Class A-2 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-2 Certificates for
such Distribution Date.
"Class A-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class A-2 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class A-3 Certificate": Any one of the Certificates with an "A-3"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
9
"Class A-3 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 4.104% per annum, and (ii) on or after the Optional
Termination Date, 4.604% per annum.
"Class A-3 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-3 Certificates for
such Distribution Date.
"Class A-3 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class A-3 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class A-4 Certificate": Any one of the Certificates with an "A-4"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class A-4 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 4.632% per annum, and (ii) on or after the Optional
Termination Date, 5.132% per annum.
"Class A-4 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-4 Certificates for
such Distribution Date.
"Class A-4 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class A-4 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class A-5 Certificate": Any one of the Certificates with an "A-5"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class A-5 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 5.497% per annum, and (ii) on or after the Optional
Termination Date, 5.997% per annum.
"Class A-5 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-2 Certificates for
such Distribution Date.
"Class A-5 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class A-2 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class A-6 Certificate": Any one of the Certificates with an "A-6"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-6, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class A-6 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.280% per annum, and (ii) on or after the Optional
Termination Date, 6.780% per annum.
10
"Class A-6 Interest Carry Forward Amount": For any Distribution
Date, the Interest Carry Forward Amount for the Class A-6 Certificates for
such Distribution Date.
"Class A-6 Lockout Distribution Amount": For any Distribution Date,
the product of (x) the Class A-6 Lockout Percentage for that Distribution Date
and (y) the Class A-6 Pro Rata Distribution Amount for that Distribution Date;
provided, that, in no event shall the Class A-6 Lockout Distribution Amount
for a Distribution Date exceed the Senior Principal Distribution Amount for
that Distribution Date or the Certificate Principal Balance of the Class A-6
Certificates immediately prior to that Distribution Date.
"Class A-6 Lockout Percentage": For any Distribution Date, the
applicable percentage set forth in the table below:
--------------------------------------------------------
Distribution Date Percentage
--------------------------------------------------------
July 2004 to June 2007 0%
July 2007 to June 2009 45%
July 2009 to June 2010 80%
July 2010 to June 2011 100%
July 2011 and thereafter 300%
--------------------------------------------------------
"Class A-6 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class A-6 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class A-6 Pro Rata Distribution Amount": For any Distribution Date,
an amount equal to the product of (x) a fraction, the numerator of which is
the Certificate Principal Balance of the Class A-6 Certificates immediately
prior to that Distribution Date and the denominator of which is the aggregate
Certificate Principal Balance of the Class A Certificates immediately prior to
that Distribution Date and (y) the Senior Principal Distribution Amount for
that Distribution Date.
"Class B Certificate": Any one of the Class B-1 Certificates, the
Class B-2 Certificates, the Class B-3 Certificates or the Class B-4
Certificates.
"Class B-1 Applied Realized Loss Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class B-1 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the sum of the Class B-2
Applied Realized Loss Amount, the Class B-3 Applied Realized Loss Amount and
the Class B-4 Applied Realized Loss Amount, in each case as of such
Distribution Date.
"Class B-1 Certificate": Any one of the Certificates with a "B-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
11
"Class B-1 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.365% per annum, and (ii) on or after the Optional
Termination Date, 6.865% per annum.
"Class B-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class B-1 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class B-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the aggregate Certificate
Principal Balances of the Class A Certificates (after taking into account
distributions of principal on the Class A Certificates on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distributions of principal on the Class M-1
Certificates on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account distributions
of principal on the Class M-2 Certificates on such Distribution Date), (iv)
the Certificate Principal Balance of the Class M-3 Certificates (after taking
into account distributions of principal on the Class M-3 Certificates on such
Distribution Date) and (v) the Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 88.40% 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 Pool
Balance on the Cut-off Date, but in no event less than zero.
"Class B-1 Realized Loss Amortization Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-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 (xiii) hereof,
in each case for such Distribution Date.
"Class B-2 Applied Realized Loss Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class B-2 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the sum of the Class B-3
Applied Realized Loss Amount and the Class B-4 Applied Realized Loss Amount,
in each case as of such Distribution Date.
"Class B-2 Certificate": Any one of the Certificates with a "B-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-2, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class B-2 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.464% per annum, and (ii) on or after the Optional
Termination Date, 6.964% per annum.
12
"Class B-2 Interest": An uncertificated interest in REMIC 2 held by
the Trustee on behalf of the holders of the Class B-2 Certificates and
representing a regular interest in REMIC 2.
"Class B-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class B-2 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class B-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the aggregate Certificate
Principal Balances of the Class A Certificates (after taking into account
distributions of principal on the Class A Certificates on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distributions of principal on the Class M-1
Certificates on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account distributions
of principal on the Class M-2 Certificates on such Distribution Date), (iv)
the Certificate Principal Balance of the Class M-3 Certificates (after taking
into account distributions of principal on the Class M-3 Certificates on such
Distribution Date), (v) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account distributions of principal on the
Class B-1 Certificates on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 90.40% 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 Pool Balance on the Cut-off Date, but in no event
less than zero.
"Class B-2 Realized Loss Amortization Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-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 (xvi) hereof,
in each case for such Distribution Date.
"Class B-3 Applied Realized Loss Amount": As to the Class B-3
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class B-3 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the Class B-4 Applied
Realized Loss Amount, in each case, as of such Distribution Date.
"Class B-3 Certificate": Any one of the Certificates with a "B-3"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-3, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class B-3 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.750% per annum, and (ii) on or after the Optional
Termination Date, 7.250% per annum.
13
"Class B-3 Interest": An uncertificated interest in REMIC 2 held by
the Trustee on behalf of the holders of the Class B-3 Certificates and
representing a regular interest in REMIC 2.
"Class B-3 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class B-3 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class B-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the aggregate Certificate
Principal Balances of the Class A Certificates (after taking into account
distributions of principal on the Class A Certificates on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distributions of principal on the Class M-1
Certificates on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account distributions
of principal on the Class M-2 Certificates on such Distribution Date), (iv)
the Certificate Principal Balance of the Class M-3 Certificates (after taking
into account distributions of principal on the Class M-3 Certificates on such
Distribution Date), (v) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account distributions of principal on the
Class B-1 Certificates on such Distribution Date), (vi) the Certificate
Principal Balance of the Class B-2 Certificates (after taking into account
distributions of principal on the Class B-2 Certificates on such Distribution
Date) and (vi) the Certificate Principal Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 92.40% 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 Pool Balance on
the Cut-off Date, but in no event less than zero.
"Class B-3 Realized Loss Amortization Amount": As to the Class B-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-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 (xix) hereof,
in each case for such Distribution Date.
"Class B-4 Applied Realized Loss Amount": As to the Class B-4
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class B-4 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the Applied Realized Loss Amount as of
such Distribution Date.
"Class B-4 Certificate": Any one of the Certificates with a "B-4"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-4, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class B-4 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.750% per annum, and (ii) on or after the Optional
Termination Date, 7.250% per annum.
14
"Class B-4 Interest": An uncertificated interest in REMIC 2 held by
the Trustee on behalf of the holders of the Class B-4 Certificates and
representing a regular interest in REMIC 2.
"Class B-4 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class B-4 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class B-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 aggregate Certificate
Principal Balances of the Class A Certificates (after taking into account
distributions of principal on the Class A Certificates on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distributions of principal on the Class M-1
Certificates on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account distributions
of principal on the Class M-2 Certificates on such Distribution Date), (iv)
the Certificate Principal Balance of the Class M-3 Certificates (after taking
into account distributions of principal on the Class M-3 Certificates on such
Distribution Date), (v) the Certificate Principal Balance of the Class B-1
Certificates (after taking into account distributions of principal on the
Class B-1 Certificates on such Distribution Date), (vi) the Certificate
Principal Balance of the Class B-2 Certificates (after taking into account
distributions of principal on the Class B-2 Certificates on such Distribution
Date), (vii) the Certificate Principal Balance of the Class B-3 Certificates
(after taking into account distributions of principal on the Class B-3
Certificates on such Distribution Date) and (viii) the Certificate Principal
Balance of the Class B-4 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 94.30% 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 Pool Balance on the Cut-off Date, but in no event less than
zero.
"Class B-4 Realized Loss Amortization Amount": As to the Class B-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-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 (xxvi) hereof,
in each case for such Distribution Date.
"Class M Certificate": Any one of the Class M-1 Certificates, the
Class M-2 Certificates or the Class M-3 Certificates.
"Class M-1 Applied Realized Loss Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class M-1 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the sum of the Class M-2
Applied Realized Loss Amount, the Class M-3 Applied Realized Loss Amount, the
Class B-1 Applied Realized Loss Amount, the Class B-2 Applied Realized Loss
Amount, the Class B-3 Applied Realized Loss Amount and the Class B-4 Applied
Realized Loss Amount, in each case as of such Distribution Date.
15
"Class M-1 Certificate": Any one of the Certificates with an "M-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class M-1 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 5.372% per annum, and (ii) on or after the Optional
Termination Date, 5.872% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class M-1 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the aggregate Certificate Principal
Balances of the Class A Certificates (after taking into account distributions
of principal on the Class A Certificates 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)
76.39% 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 Pool Balance on the Cut-off Date,
but in no event less than zero.
"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 Applied Realized Loss Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class M-2 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the sum of the Class M-3
Applied Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the
Class B-2 Applied Realized Loss Amount, the Class B-3 Applied Realized Loss
Amount and the Class B-4 Applied Realized Loss Amount, in each case as of such
Distribution Date.
"Class M-2 Certificate": Any one of the Certificates with an "M-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-3, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class M-2 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 5.774% per annum, and (ii) on or after the Optional
Termination Date, 6.274% per annum.
16
"Class M-2 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class M-2 Fixed Rate and (ii) the related Rate Cap for such
Distribution Date.
"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 aggregate Certificate Principal
Balances of the Class A Certificates (after taking into account distributions
of principal on the Class A Certificates on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account distributions of principal on the Class M-1 Certificates 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) 84.39% 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
Pool Balance on the Cut-off Date, but in no event less than zero.
"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 Applied Realized Loss Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the
Certificate Principal Balance thereof (after taking into account the
distribution of the Principal Remittance Amount on such Distribution Date, but
prior to the application of the Class M-3 Applied Realized Loss Amount, if
any, on such Distribution Date) and (y) the excess of (i) the Applied Realized
Loss Amount as of such Distribution Date over (ii) the sum of the Class B-1
Applied Realized Loss Amount, the Class B-2 Applied Realized Loss Amount, the
Class B-3 Applied Realized Loss Amount and the Class B-4 Applied Realized Loss
Amount, in each case as of such Distribution Date.
"Class M-3 Certificate": Any one of the Certificates with an "M-3"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-4, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class M-3 Fixed Rate": For each Distribution Date (i) prior to the
Optional Termination Date, 6.267% per annum, and (ii) on or after the Optional
Termination Date, 6.767% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, the
lesser of (i) the Class M-3 Fixed Rate Certificate Margin and (ii) the related
Rate Cap for such Distribution Date.
"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 aggregate Certificate Principal
Balances of the Class A Certificates (after taking into account distributions
of principal on the Class A Certificates on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account distributions
17
of principal on the Class M-1 Certificates on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after
taking into account distributions of principal on the Class M-2 Certificates
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) 86.40% 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
Pool Balance on the Cut-off Date, but in no event less than zero.
"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 N Certificate": Any one of the Class N Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C-6, representing the
right to distributions as set forth herein and therein. The Class N
Certificates shall not represent an interest in any REMIC.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C-1-1 and evidencing the
ownership of the Class R-1 Interest and the Class R-2 Interest.
"Class R-X Certificate": The Class R-X Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C-1-2 and evidencing the
ownership of the Class R-3 Interest, the Class R-4 Interest, the Class R-5
Interest and the Class R-6 Interest.
"Class R-1 Interest": The uncertificated residual interest in REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in REMIC
2.
"Class R-3 Interest": The uncertificated residual interest in REMIC
3.
"Class R-4 Interest": The uncertificated residual interest in REMIC
4.
"Class R-5 Interest": The uncertificated residual interest in REMIC
5.
"Class R-6 Interest": The uncertificated residual interest in REMIC
6.
"Class X Certificate": Any one of the Class X Certificates executed
by the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C-5, representing the
right to distributions as set forth herein and therein.
18
"Class X/N Certificate": An uncertificated certificate in REMIC 6
held by the Trustee on behalf of the holders of the Class X and Class N
Certificates and representing a regular interest in REMIC 5.
"Class X/N Interest": An uncertificated interest in REMIC 2 held by
the Trustee on behalf of the holders of the Class X and Class N Certificates
and representing a regular interest in REMIC 2.
"Class X/N Pass Through Rate": The excess of (I) the Rate Cap over
(ii) the product of (a) two and (b) the weighted average of the pass through
rate in respect of the REMIC 1 Interests (excluding the Class R-1 Interest),
subjecting each such class (other than the Class I-Accrual Interest) to a cap
equal to the pass through rate in respect of its class of Corresponding
Certificates and the Class I-Accrual Interest to a cap of zero.
"Class X Distributable Amount": With respect to any Distribution
Date, the excess of (i) the aggregate of amounts distributable on the Class
X/N Certificates for such Distribution Date, over (ii) the aggregate of
amounts distributable to the Class N Certificates pursuant to Section 4.02(B).
"Closing Date": July 7, 2004.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained
by the Servicer pursuant to Section 3.04, which shall be entitled "Collection
Account, Xxxxxx Loan Servicing LP, as Servicer for the Trust under the Pooling
and Servicing Agreement dated as of June 1, 2004 among X.X. Xxxxxx Acceptance
Corporation I., as Depositor, Credit-Based Asset Servicing and Securitization
LLC, as Seller, Xxxxxx Loan Servicing LP, as Servicer and U.S. Bank National
Association, as Trustee, in trust for registered Holders of 2004-CB4 Trust,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4," and which
must be an Eligible Account.
"Collection Period": With respect to any Distribution Date, the
period from the second day of the calendar month preceding the month in which
such Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
"Combined Loan-to-Value Ratio": As of any date and Mortgage Loan,
the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan plus the principal balance of any
related senior mortgage loan, and the denominator of which is the Value of the
related Mortgaged Property.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Conventional Mortgage Loan": Any Mortgage Loan that is not an FHA
Loan.
19
"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 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention:
Structured Finance, CMLT C-BASS 2004-CB4, or at such other address as the
Trustee may designate from time to time by notice to the Certificateholders,
the Depositor, the Servicer and the Seller.
"Custodial Agreement": The Custodial Agreement, dated as of June 1,
2004, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.
"Custodian": The Bank of New York, a New York banking corporation,
or any successor custodian appointed pursuant to the terms of the Custodial
Agreement.
"Cut-off Date": June 1, 2004.
"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.
"Deferred Interest": With respect to any Mortgage Loan identified on
the Mortgage Loan Schedule as having the possibility of negative amortization,
the current portion of interest not currently paid by the Mortgagor that is
added to the principal balance of such Mortgage Loan.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding principal balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a Due
Date with respect to which such monthly payment is not made by the close of
business on the next scheduled Due Date for such Mortgage Loan.
"Depositor": X.X. Xxxxxx Acceptance Corporation I, a Delaware
corporation, or any successor in interest.
20
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as
a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository, to
be dated on or about the Closing Date.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding
such 10th day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation
of such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust other than through
an Independent Contractor; PROVIDED, HOWEVER, that the Trustee (or the
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee (or the Servicer under this Agreement)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any possession of
the United States, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (ii) any organization
(other than a cooperative described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code unless such organization
is subject to the tax imposed by Section 511 of the Code, (iii) any
organization described in Section 1381(a)(2)(C) of the Code, or (iv) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided
by nationally recognized counsel to the Trustee that the holding of an
ownership interest in a Residual Certificate by such Person may cause the
Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the
transfer of an ownership interest in a Residual Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof if all of its activities are
subject to tax and a majority of its board of directors is not selected by a
governmental unit. The term "United States," "state" and "international
organization" shall have the meanings set forth in Section 7701 of the Code.
21
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, U.S. Bank National Association, as Trustee, in trust
for the registered Holders of 2004-CB4 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4" and which must be an Eligible
Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in July 2004.
"Distribution Information": The items calculated and reported by the
Trustee pursuant to Section 4.06(a)(i), (ii), (iii) and (xiv) through (xxii)
and any other information included in the Monthly Statement aggregated and/or
calculated by the Trustee from (a) information contained in the Remittance
Report or (b) other information furnished to the Trustee by the Servicer
pursuant to Section 4.07.
"DBRS": Dominion Bond Rating Service, Inc. and its successors, and
if such company shall for any reason no longer perform the functions of a
securities rating agency, "DBRS" 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.
"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" (or the equivalent) by each of the Rating Agencies at
the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC (to the limits established
by such corporation), the uninsured deposits in which account are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to each Rating Agency, the Certificateholders will have a claim
with respect to the funds in such account or a perfected first priority
security interest against such collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account
is maintained, (iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution, national
banking association or trust company acting in its fiduciary capacity or (iv)
an account otherwise acceptable to each Rating Agency without reduction or
withdrawal of their then current ratings of the Certificates as evidenced by a
letter from each Rating Agency to the Trustee. Eligible Accounts may bear
interest.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for
a Defective Mortgage Loan pursuant to the terms of this Agreement which must,
on the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled
22
payments of principal and interest due during or prior to the month of
substitution, not in excess of, and not more than 5% less than, the
outstanding principal balance of the Defective Mortgage Loan as of the Due
Date in the calendar month during which the substitution occurs, (ii) have a
Mortgage Interest Rate, with respect to a Fixed-Rate Mortgage Loan, not less
than the Mortgage Interest Rate of the Defective Mortgage Loan and not more
than 1% in excess of the Mortgage Interest Rate of such Defective Mortgage
Loan, (iii) if an Adjustable-Rate Mortgage Loan, have a Maximum Loan Rate not
less than the Maximum Loan Rate for the Defective Mortgage Loan, (iv) if an
Adjustable-Rate Mortgage Loan, have a Minimum Loan Rate not less than the
Minimum Loan Rate of the Defective Mortgage Loan, (v) if an Adjustable-Rate
Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin
of the Defective Mortgage Loan, (vi) if an Adjustable-Rate Mortgage Loan, have
a next Adjustment Date not more than two months later than the next Adjustment
Date on the Defective Mortgage Loan, an Eligible Substitute Mortgage Loan must
have all Adjustment Dates occurring during the same Interest Accrual Period
during which Adjustment Dates occur with respect to the substituted Mortgage
Loan, (vii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Defective Mortgage Loan, (viii) be
current as of the date of substitution, (ix) have a Combined Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Combined
Loan-to-Value Ratio of the Defective Mortgage Loan as of such date, (x) have a
risk grading determined by the Seller at least equal to the risk grading
assigned on the Defective Mortgage Loan, (xi) have been reunderwritten by the
Seller in accordance with the same underwriting criteria and guidelines as the
Defective Mortgage Loan and (xii) conform to each representation and warranty
set forth in Section 2.04 hereof applicable to the Defective Mortgage Loan. In
the event that one or more mortgage loans are substituted for one or more
Defective Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balances, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the risk gradings described in
clause (x) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (vii) hereof shall be determined on the basis of weighted
average remaining term to maturity, the Combined Loan-to-Value Ratios
described in clause (ix) hereof shall be satisfied as to each such mortgage
loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xii) 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 Mezzanine Certificates,
Class N, Class X and Residual Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
23
"Expense Fee Rate": The sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration, an agency within HUD.
"FHA Approved Mortgagee": Those institutions which are approved by
FHA to act as servicer and mortgagee of record pursuant to FHA Regulations.
"FHA Insurance Contract" or "FHA Insurance": The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
"FHA Loan": A Mortgage Loan which is the subject of an FHA Insurance
Contract as evidenced by a Mortgage Insurance Certificate.
"FHA Regulations": Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.12.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Servicer pursuant to or as contemplated by
Section 2.03 or 10.01), a determination made by the Servicer that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries
which the Servicer, in its reasonable good faith judgment, expects to be
finally recoverable in respect thereof have been so recovered. The Servicer
shall maintain records, prepared by a Servicing Officer, of each Final
Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the Securities and Exchange Commission.
"Fixed-Rate 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.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to
the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
24
"Highest Priority": As of any date of determination, the Class of
Mezzanine Certificates or Class A Certificates then outstanding with a
Certificate Principal Balance greater than zero, with the highest priority for
payments pursuant to Section 4.02, in the following order: Class A, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Servicer and
their respective Affiliates, (ii) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the
Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor or the Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent
of the Depositor or the Servicer or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any Class of securities issued
by the Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Certificates), so
long as the Trust Fund does not receive or derive any income from such Person
and provided that the relationship between such Person and the Trust Fund is
at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the
Trustee has received an Opinion of Counsel, which Opinion of Counsel shall be
an expense of the Trust Fund, to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class N, Class X or Residual Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Notional Amount": With respect to any Class N Certificate,
the amount designated "Initial Notional Amount" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not to be applied to
25
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Servicer would follow in
servicing mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and
(i) with respect to the Class A-1 Certificates, the period from the preceding
Distribution Date to the day prior to the current Distribution Date (or, in
the case of the first Distribution Date, the period from the Closing Date
through July 25, 2004), and (ii) with respect to the Class A Certificates
(other than the Class A-1 Certificates), the Mezzanine Certificates, Class N
and Class X Certificates, the calendar month immediately preceding the month
in which such Distribution Date occurs.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class X and Residual Certificates) and any Distribution Date,
the sum of (a) the excess, if any, of the Accrued Certificate Interest and any
Interest Carry Forward Amount for the prior Distribution Date, over the amount
in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable
Pass-Through Rate for the actual number of days elapsed on the basis of a
360-day year since the prior Distribution Date.
"Interest Percentage": With respect to any Class of Certificates,
the Class B-2 Interest, the Class B-3 Interest, the Class B-4 Interest and the
Class X/N Interest 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 such Classes, in
each case with respect to such Distribution Date.
"Interest Remittance Amount": As of any Determination 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 (less the
Servicing Fee, amounts available for reimbursement of Advances and Servicing
Advances pursuant to Section 3.05 and expenses reimbursable pursuant to
Section 6.03), (ii) all Compensating Interest paid by the Servicer on such
Determination Date with respect to the Mortgage Loans and (iii) the portion of
any payment in connection with any substitution, Purchase Price, Termination
Price or Net Liquidation Proceeds relating to interest with respect to the
Mortgage Loans received during the related Prepayment Period.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any
related Collection Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to
any acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such Collection Period and not
previously recovered.
"LIBOR": With respect to the Class A-1 Certificates and each
Interest Accrual Period, the rate determined by the Trustee on the related
LIBOR Determination Date on the basis of the offered rate for one month United
States dollar deposits, as such rate appears on the Telerate Page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date. If no
26
such quotations are available on an LIBOR Determination Date, LIBOR for the
related Interest Accrual Period will be established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more
Reference Banks provide such offered quotations, LIBOR for the
related Interest Accrual Period shall be the arithmetic mean of
such offered quotations (rounded upwards if necessary to the
nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the
related Interest Accrual Period shall be the arithmetic mean of the
rates quoted by one or more major banks in New York City, selected
by the Trustee after consultation with the Depositor, as of 11:00
A.M., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance
of the Class A-1 Certificates; and
(iii) If no such quotations can be obtained, LIBOR for
the related Interest Accrual Period shall be LIBOR for the prior
Distribution Date.
"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 Carryover Amount": For any Distribution Date and any Class
A-1 Certificate, the excess of (i) the amount of interest accrued on such
Certificate based on the related Pass-Through Rate (without regard to the
related Rate Cap), over (ii) the amount of interest accrued on such
Certificate based on the related Rate Cap, together with the unpaid portion of
any such excess from prior Distribution Dates (and interest accrued thereon at
the then applicable Pass-Through Rate (without regard to the related Rate
Cap)) on such Certificate.
"LIBOR Carryover Reserve Account": The reserve account established
and maintained pursuant to Section 3.29.
"LIBOR Determination Date": With respect to any Interest Accrual
Period for the Class A-1 Certificates, the second LIBOR Business Day preceding
the first day of such Interest Accrual Period.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds and Insurance Proceeds which
it expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Fund by reason of its being purchased,
sold or replaced pursuant to or as contemplated by Section 2.03 or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery
27
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant
to Section 3.13 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received
by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation
or (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form and containing such information as is agreed to by
the Servicer and the Trustee.
"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 R Certificateholders": The Holders of Residual
Certificates evidencing at least a 51% Percentage Interest in the applicable
Class of Residual Certificates.
"Maximum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.
"Mezzanine Certificates": Together, the Class M Certificates and the
Class B Certificates.
"Minimum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of (i) the Monthly Excess
Interest Amount and (ii) the Overcollateralization Release Amount.
"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 Section (i) through (x).
"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
28
to (i) any Deficient Valuation and/or Debt Service Reduction with respect to
such Mortgage Loan and (ii) any reduction in the amount of interest collectible
from the related Mortgagor pursuant to the Relief Act; (b) without giving
effect to any extension granted or agreed to by the Servicer pursuant to
Section 3.01; and (c) on the assumption that all other amounts, if any, due
under such Mortgage Loan are paid when due.
"Monthly Statement": The statement prepared and distributed by the
Trustee pursuant to Section 4.06(a).
"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 and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Insurance Certificate": The certificate evidencing an FHA
Insurance Contract.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time
in accordance with the provisions of the related Mortgage Note, which rate (i)
in the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate
set forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in
effect immediately following the Cut-off Date and (ii) in the case of each
Adjustable-Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the Cut- off Date shall be the rate set forth
in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date,
to equal the sum, rounded to the nearest 0.125% as provided in the Mortgage
Note, of the Index, determined as set forth in the related Mortgage Note, plus
the related Gross Margin subject to the limitations set forth in the related
Mortgage Note. With respect to each Mortgage Loan that becomes an REO
Property, as of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date such
Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held
as a part of the Trust Fund, the Mortgage Loans so held being identified in
the Mortgage Loan Schedule.
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"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of July 7, 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 (i) 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 be
prepared by the Seller and shall set forth the following information with
respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged
Property or a designation that the Mortgaged Property is a multi-family
property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off
Date;
(12) [reserved];
(13) the Mortgage Interest Rate of the Mortgage Loan as of the
Cut-off Date;
(14) the current principal and interest payment of the Mortgage Loan
as of the Cut- off Date;
(15) the contractual interest paid to date of the Mortgage Loan;
(16) if the Mortgage Loan is not owner-financed, the Combined
Loan-to-Value Ratio at origination;
(17) a code indicating the loan performance status of the Mortgage
Loan as of the Cut-off Date;
(18) a code indicating whether the Mortgage Loan is a Simple
Interest Mortgage Loan or an Actuarial Mortgage Loan;
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(19) a code indicating whether the Mortgaged Property is in
bankruptcy or in its forbearance period as of the Cut-off Date;
(20) a code indicating whether the Mortgage Loan is conventional or
insured by the FHA;
(21) with respect to each Adjustable-Rate Mortgage Loan, a code
indicating the Index that is associated with such Mortgage Loan, the Gross
Margin, the Periodic Rate Cap, the Minimum Loan Rate, the Maximum Loan
Rate, the first Adjustment Date immediately following the Cut-off Date,
the rate adjustment frequency and the payment adjustment frequency;
(22) a code indicating whether the Mortgage Loan has a Prepayment
Charge and the type of Prepayment Charge;
(23) a code indicating whether the Mortgage Loan is owner-financed;
(24) a code indicating whether the Mortgage Loan is subject to
negative amortization; and
(25) 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 by the
Seller in accordance with the provisions of this Agreement. With respect to
any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut- off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling or multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
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"Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer, will not or, in the case of
a proposed Advance or Servicing Advance, would not be ultimately recoverable
from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": Immediately prior to any Distribution Date, with
respect to the Class X/N Interest, the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interests. With respect to the Class N
Certificates, an amount equal to the Original Class N Notional Amount reduced
by the aggregate distributions made to the Class N Certificates pursuant to
Section 4.02(B)(II)(xxix).
"Offered Certificates": The Class A Certificates and the Mezzanine
Certificates (other than the Class B-3 and Class B-4 Certificates).
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), or by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or
the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer except
that any opinion of counsel relating to (a) the qualification of any REMIC as
a REMIC or (b) compliance with the REMIC Provisions must be an opinion of
Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Servicer or an Affiliate of the Servicer may opt to terminate the Mortgage
Pool pursuant to Section 10.01.
"Original Class N Notional Amount": The Notional Amount of the Class
N Certificates on the Closing Date, as set forth opposite such Class in the
Preliminary Statement.
"Original Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class in the Preliminary Statement,
except with respect to the Class N, Class X and Residual Certificates, which
have an Original Class Certificate Principal Balance of zero.
"Overcollateralization Amount": As of any Distribution Date, the
excess of (x) the Pool Balance as of the last day of the immediately preceding
Collection Period over (y) the aggregate Certificate Principal Balances of the
Class A Certificates and the Mezzanine Certificates (after taking into account
all distributions of principal on such Distribution Date).
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"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 aggregate Certificate Principal
Balance of the Class A Certificates and the Mezzanine Certificates resulting
from the distribution of the Principal Remittance 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 distribution on the Offered
Certificates, the Class B-3 Certificates and the Class B-4 Certificates on
such Distribution Date), over (ii) the Targeted Overcollateralization Amount
for such Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate, the
Class A-2 Pass-Through Rate, the Class A-3 Pass-Through Rate, the Class A-4
Pass-Through Rate, the Class A-5 Pass-Through Rate, the Class A-6 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 B-1 Pass-Through Rate, the Class B-2
Pass-Through Rate, the Class B-3 Pass-Through Rate and the Class B-4
Pass-Through Rate. With respect to the Class N Certificates, the Pass- Through
Rate is 10.00% per annum.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class N, Class X or Residual Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal
Balance, as the case may be, represented by such Certificate and the
denominator of which is the Original Class Certificate Principal Balance of
the related Class. With respect to a Class N Certificate, the undivided
percentage interest obtained by dividing the Initial Notional Amount evidenced
by such Certificate by the Original Class N Notional Amount. With respect to a
Class X or Residual Certificate, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate;
provided, however, that the sum of all such percentages for each such Class
totals 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard
to the Maximum Loan Rate or the Minimum Loan Rate) on such Adjustment Date
from the Mortgage Interest Rate in effect immediately prior to such Adjustment
Date.
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"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued or managed by the Depositor, the Servicer,
the Trustee or any of their respective Affiliates or for which an Affiliate of
the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agents acting
in 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 (i.e., A-1+ and A-1) and
Moody's and the highest available rating category of Fitch and provided
that each such investment has an original maturity of no more than 365
days and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal)
rated A-1 or higher by S&P and Fitch and rated A2 or higher by Moody's,
PROVIDED, HOWEVER, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market prices plus accrued
interest or (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Trustee in exchange for such
collateral and (C) be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by each Rating
Agency in its highest long-term unsecured rating categories at the time
of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 including funds managed or advised by the Trustee or
affiliates thereof having the highest rating category by the applicable
Rating Agency; and
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(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security
or investment, as may be acceptable to the Rating Agencies in writing as
a permitted investment of funds backing securities having ratings
equivalent to its highest initial rating of the Class A Certificates;
PROVIDED, that no instrument described hereunder shall evidence either the
right to receive (a) only interest with respect to the obligations underlying
such instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity at par greater
than 120% of the yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate
other than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Prepayment Assumption": As set forth in the Prospectus Supplement.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, fee or charge payable by the a Mortgagor in connection
with any Principal Prepayment pursuant to the terms of the related Mortgage
Note.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in full that was applied by the Servicer to
reduce the outstanding principal balance of such loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the related Prepayment
Period.
"Prepayment Period": With respect to any Distribution Date, 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
all collections credited against the principal balance of any such Mortgage
Loan and the principal portion of Advances plus, Deferred Interest, if any.
For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to
have a Principal Balance equal to the Principal Balance of the related
Mortgage Loan as of the final recovery of related Liquidation Proceeds and a
Principal Balance of zero thereafter. As to any REO Property and any day, the
Principal Balance of the related Mortgage Loan immediately prior to such
Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
35
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the
full amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Remittance Amount": With respect to any Distribution
Date, the sum (without duplication) of the following amounts (less amounts
available for reimbursement of Advances and Servicing Advances pursuant to
Section 3.05 and expenses reimbursable pursuant to Section 6.03) with respect
to the Mortgage Loans and the immediately preceding Collection Period: (i)
each payment of principal on a Mortgage Loan due during such Collection Period
and received by the servicer on or prior to the related Determination Date,
including any Advances with respect thereto, (ii) all full and partial
Principal Prepayments on the mortgage loans received by the servicer during
the related Prepayment Period, (iii) the Net Liquidation Proceeds allocable to
principal on the Mortgage Loans and any Subsequent Recoveries on the Mortgage
Loans actually collected by the 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 Adjustments Amounts received on or prior to the previous
Determination Date and not yet distributed, and (vi) on the Distribution Date
on which the Trust is to be terminated in accordance with Section 10.01
hereof, that portion of the Termination Price in respect of principal on the
Mortgage Loans.
"Private Certificates": Any of the Class B-3, Class B-4, Class N,
Class X and Residual Certificates.
"Property Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Proportionate Holder": As defined in Section 9.01(n) hereof.
"Prospectus Supplement": That certain Prospectus Supplement dated
July 1, 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, and
as confirmed by an Officers' Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in
the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at
the applicable Mortgage Interest Rate in effect from time to time from the Due
Date as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of
purchase been distributed pursuant to Section 4.01 and Section 4.02, through
the end of the calendar month in which the purchase is to be effected, and (y)
an REO Property, its fair market value, determined in good faith by the
Servicer, (iii) any unreimbursed Servicing Advances and Advances and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv)
any amounts previously withdrawn
36
from the Collection Account in respect of such Mortgage Loan or REO Property
pursuant to Section 3.13, and (v) in the case of a Mortgage Loan required
to be purchased pursuant to Section 2.03, expenses reasonably incurred or to
be incurred by the Servicer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation, including any costs and damages
incurred by the Trust Fund in connection with any violation by such loan of
any predatory or abusive lending law.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Xxx
or Xxxxxxx Mac.
"Rate Cap": With respect to the Class A Certificates (other than the
Class A-1 Certificates) and the Mezzanine Certificates and any Distribution
Date, a per annum rate equal to the product of (i) the average of the Net
Mortgage Interest Rates of the Mortgage Loans, weighted on the basis of the
Principal Balances of the Mortgage Loans as of the first day of the related
Collection Period (or, in the case of the first Distribution Date, the Cut-off
Date) and (ii) a fraction, the numerator of which is 30 and the denominator of
which is 360. With respect to the Class A-1 Certificates and any Distribution
Date, a per annum rate equal to the product of (i) the average of the Net
Mortgage Interest Rates of the Mortgage Loans, weighted on the basis of the
Principal Balances of the Mortgage Loans as of the first day of the related
Collection Period (or, in the case of the first Distribution Date, the Cut-off
Date) and (ii) a fraction, the numerator of which is the actual number of days
elapsed in the related Interest Accrual Period and the denominator of which is
360.
"Rating Agency or Rating Agencies": DBRS, 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 and the Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal
balance of the related Mortgage Loan.
"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 B-1 Realized Loss
Amortization Amount, the Class B-2 Realized Loss Amortization Amount, the
Class B-3 Realized Loss Amortization Amount and the Class B-4 Realized Loss
Amortization Amount.
"Record Date": With respect to the Class A-1 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 Class A Certificates (other than the Class A-1 Certificates),
the Mezzanine Certificates, the Class X Certificates, the Class N Certificates
and the Residual Certificates and the first Distribution Date, the Closing
Date, and with respect to each
37
Distribution Date following the first Distribution Date, 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 Trustee, (iii) whose quotations
appear on the Telerate Page 3750 on the relevant LIBOR Determination Date and
(iv) which have been designated as such by the Trustee; PROVIDED, HOWEVER,
that if fewer than two of such banks provide a LIBOR rate, then any leading
banks selected by the Trustee which are engaged in transactions in United
States dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates, the Class
B-3 Certificates and Class X/N Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Note, Mortgage and other documents required by Section 2.01.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act, the amount
by which (i) interest collectible on such Mortgage Loan during such Collection
Period is less than (ii) one month's interest on the Principal Balance of such
Mortgage Loan at the Mortgage Interest Rate for such Mortgage Loan before
giving effect to the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered
hereunder, with respect to which a REMIC election is to be made consisting of:
(i) such Mortgage Loans as from time to time are subject to this Agreement,
together with the Mortgage Files relating thereto, and together with all
collections thereon and proceeds thereof, (ii) any REO Property, together with
all collections thereon and proceeds thereof, (iii) the Trustee's rights with
respect to the Mortgage Loans under all insurance policies, required to be
maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection Account, the
Distribution Account (subject to the last sentence of this definition) and any
REO Account and such assets that are deposited therein from time to time and
any investments thereof, together with any and all income, proceeds and
payments with respect thereto. Notwithstanding the foregoing, however, a REMIC
election will not be made with respect to the LIBOR Carryover Reserve Account.
"REMIC 2": The segregated pool of assets consisting of all of the
REMIC 1 Regular Interests conveyed in trust to the Trustee, for the benefit of
the Holders of the regular interests and the Class R Certificate (in respect
of the Class R-2 Interest), pursuant to Article II
38
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC 2 Regular Interests": The Class B-2 Interest, the Class B-3
Interest, the Class B-4 Interest and the Class X/N Interest.
"REMIC 3": The segregated pool of assets consisting of the Class B-2
Interest conveyed in trust to the Trustee, for the benefit of the Holders of
the Class B-2 Certificates and the Class R-X Certificate (in respect of the
Class R-3 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 4": The segregated pool of assets consisting of the Class B-3
Interest conveyed in trust to the Trustee, for the benefit of the Holders of
the Class B-3 Certificates and the Class R-X Certificate (in respect of the
Class R-4 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 5" The segregated pool of assets consisting of the Class B-4
Interest conveyed in trust to the Trustee, for the benefit of the Holders of
the Class B-4 Certificates and the Class R-X Certificate (in respect of the
Class R-5 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.
"REMIC 6": The segregated pool of assets consisting of the Class X/N
Interest conveyed in trust to the Trustee, for the benefit of the Holders of
the Class N Certificates and the Class X Certificates and the Class R-X
Certificate (in respect of the Class R-6 Interest), pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the
foregoing may be in effect from time to time.
"REMIC Regular Interests": The REMIC 1 Regular Interests and the
REMIC 2 Regular Interests.
"Remittance Report": A report prepared by the Servicer and delivered
to the Trustee pursuant to Section 4.07, containing the information attached
hereto as Exhibit M.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust Fund.
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"REO Principal Amortization": With respect to any REO Property, for
any calendar month, the aggregate of all amounts received in respect of such
REO Property during such calendar month, whether in the form of rental income,
sale proceeds (including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property)
or otherwise, net of any portion of such amounts (i) payable pursuant to
Section 3.13 in respect of the proper operation, management and maintenance of
such REO Property or (ii) payable or reimbursable to the Servicer pursuant to
Section 3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan
and unreimbursed Servicing Advances and Advances in respect of such REO
Property or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure,
as described in Section 3.13.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) a one-family
dwelling, (ii) a two- to four-family dwelling, (iii) a one-family dwelling
unit in a Xxxxxx Xxx eligible condominium project, (iv) a one-family dwelling
in a planned unit development, which is not a co-operative, or (v) a mobile or
manufactured home (as defined in 00 Xxxxxx Xxxxxx Code, Section 5402(6)).
"Residual Certificates": The Class R Certificates and the Class R-X
Certificates.
"Residual Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": Any officer assigned to the Corporate Trust
Division (or any successor thereto) of the Trustee, including any Vice
President, Assistant Vice President, Trust Officer, any Assistant Secretary,
any trust officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and in each case having direct responsibility for the administration of this
Agreement.
"S&P": Standard & Poor's, 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.
"Seller": Credit-Based Asset Servicing and Securitization LLC, or
its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balances of the Mezzanine Certificates and (ii) the
Overcollateralization Amount, in each case before taking into account the
distribution of the Principal Remittance Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
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"Senior 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 aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 67.39% and (ii) the Principal Balance of the
Mortgage Loans as of the last day of the related Collection Period and (B) the
Principal Balance of the Mortgage Loans as of the last day of the related
Collection Period minus the product of (i) 0.50% and (ii) the Principal
Balance of the Mortgage Loans on the Cut-off Date, but in no event less than
zero.
"Servicer": Xxxxxx Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer hereunder.
"Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Servicer or which is 50% or more owned by the
Servicer and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events described
in Section 7.01.
"Servicer Remittance Date": With respect to any Distribution Date,
one Business Day prior to such Distribution Date.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Servicer in the performance of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property, (iv) compliance with the
obligations under Section 3.08 and (v) rebating any points and fees that are
to be reimbursed to a Mortgagor due to a Principal Prepayment.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished
by the Servicer to the Trustee and the Depositor on the Closing Date, as such
list may from time to time be amended.
"Servicing Rights Pledgee": One or more lenders, selected by the
Servicer, to which the Servicer may pledge and assign all of its right, title
and interest in, to and under this Agreement, including Wachovia Bank,
National Association as the representative of certain lenders.
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"Servicing Standard": Shall mean the standards set forth in Section
3.01.
"Simple Interest Method": The method of allocating a payment to
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made and divided by either
360 or 365, as specified in the related Mortgage Note, and the remainder of
such payment is allocated to principal.
"Simple Interest Mortgage Loan": Any Mortgage Loan under which the
portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
"Special Hazard Losses": Realized Losses that result from direct
physical damage to Mortgaged Properties caused by natural disasters and other
hazards (i) which are not covered by hazard insurance policies (such as
earthquakes) and (ii) for which claims have been submitted and rejected by the
related hazard insurer and any shortfall in insurance proceeds for partial
damage due to the application of the co-insurance clauses contained in hazard
insurance policies.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the
Bankruptcy Code.
"Stepdown Date": The earlier to occur of (x) the Distribution Date
on which the aggregate Certificate Principal Balance of the Class A
Certificates is zero and (y) the later to occur of (A) the Distribution Date
in July 2007 and (B) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to 32.61%.
"Subsequent Recoveries": As of any Distribution Date, amounts
received by the Servicer (net of any expenses permitted to be reimbursed
pursuant to Section 3.05) or surplus amounts held by the Servicer to cover
estimated expenses (including, but not limited to, recoveries in respect of
the representations and warranties made by the Seller pursuant to the Mortgage
Loan Purchase Agreement) specifically related to a Mortgage Loan that was the
subject of a Final Recover Determination or an REO Disposition prior to the
related Prepayment Period that resulted in a Realized Loss.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 2.85% of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans, (y) on and after the Stepdown Date
provided that a Trigger Event is not in effect, the lesser of (i) 2.85% of the
aggregate Cut-off Date Principal Balance of the Mortgage Loans and (ii) the
greater of (A) 5.70% of the Pool Balance as of the last day of the related
Collection Period and (B) 0.50% of the aggregate Cut-off Date Principal
Balance of the Mortgage Loans
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and (z) on or after the Stepdown Date and if a Trigger Event is in effect, 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 eight REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and
all other information reports or returns that may be required to be furnished
to the Certificateholders or filed with the Internal Revenue Service or any
other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date a Trigger
Event is in effect, if (i) the three-month rolling average of 60+ Day
Delinquent Loans equals or exceeds 49.00% 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
amount of Subsequent Recoveries received since the Cut-off Date through the
last day of the related Collection Period) divided by the initial Pool Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date occurring in Percentage
-------------------------------------- --------------------------
July 2007 through June 2008 2.25%
July 2008 through June 2009 3.75%
July 2009 through June 2010 5.00%
July 2010 through June 2011 5.75%
July 2011 and thereafter 6.00%
"Trust": 2004-CB4 Trust, the trust created hereunder.
"Trust Fund": All of the assets of the Trust, which is the trust
created hereunder consisting of REMIC 1, REMIC 2, REMIC 3, REMIC 4, REMIC 5,
REMIC 6 and the LIBOR Carryover Reserve Account.
"Trustee": U.S. Bank National Association, a national banking
association, or any successor Trustee appointed as herein provided.
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"Trustee Fee": With respect to any Distribution Date, the product of
(x) one twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal
Balances of all Mortgage Loans as of the opening of business on the first day
of the related Collection Period.
"Trustee Fee Rate": With respect to any Distribution Date, 0.007%
per annum.
"Uncertificated Accrued Interest": With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass- Through Rate on the
Uncertificated Principal Balance 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).
"Underwriters": X.X. Xxxxxx Securities Inc., Citigroup Global
Markets Inc. and Xxxxxxxx & Partners, L.P., as underwriters with respect to
the Offered Certificates.
"United States Person" or "U.S. Person": (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated
as a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or
the District of Columbia (unless, in the case of a partnership, Treasury
regulations provide otherwise) or (iii) an estate the income of which is
includible in gross income for United States tax purposes, regardless of its
source, or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust. Notwithstanding the preceding sentence, to the extent provided
in Treasury regulations, certain Trusts in existence on August 20, 1996, and
treated as United States persons prior to such date, that elect to continue to
be treated as United States persons will also be a U.S. Person.
"Unpaid Realized Loss Amount": For any Class of Class A Certificate
or Mezzanine Certificate and as to any Distribution Date, the excess of (x)
the aggregate Applied Realized Loss Amounts applied with respect to such Class
for all prior Distribution Dates over (y) the aggregate Realized Loss
Amortization Amounts with respect to such Class for all prior Distribution
Dates and reduced by the amount of the increase in the related Certificate
Principal Balance due to the receipt of Subsequent Recoveries as provided in
Section 4.02.
"Value": With respect to any Mortgaged Property, the value thereof
as determined by an independent appraisal made at the time of the origination
of the related Mortgage Loan or the sale price, if the appraisal is not
available; except that, with respect to any Mortgage Loan that is a purchase
money mortgage loan, the lesser of (i) the value thereof as determined by an
independent appraisal made at the time of the origination of such Mortgage
Loan, if any, and (ii) the sales price of the related Mortgaged Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights
allocated among Holders of the Offered Certificates, the Class B-3
Certificates and the Class B-4 Certificates shall be 98%, and shall be
allocated among each such Class according to the fraction, expressed as a
percentage, the
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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, the Class B-3 Certificates and the Class B-4 Certificates then
outstanding. The Voting Rights allocated to each such Class of Certificates
shall be allocated among all holders of each such Class in proportion to the
outstanding Certificate Principal Balance of such Certificates; PROVIDED,
HOWEVER, that any Certificate registered in the name of the Servicer, the
Depositor, the Trustee or any of its respective affiliates shall not be
included in the calculation of Voting Rights; provided that only such
Certificates as are known by a Responsible Officer of the Trustee to be so
registered will be so excluded. The percentage of all the Voting Rights
allocated among the Holders of the Class X Certificate shall be 2%. The Class
N and Residual Certificates shall have no Voting Rights.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or
added or any distributions are taken into account such definition or
calculation and any related definitions or calculations shall be determined
without duplication of such functions.
Section 1.03 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Accrued Certificate
Interest for the Class A Certificates, the Mezzanine Certificates and the
Class X/N Interest for any Distribution Date, (1) the aggregate amount of any
Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred
in respect of the Mortgage Loans for any Distribution Date shall be allocated
first, among the Class X/N Interest on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable Pass-Through Rate on
the Notional Amount thereof and, thereafter, among the Class A Certificates
and the Mezzanine Certificates on a PRO RATA basis based on, and to the extent
of, one month's interest at the then applicable respective Pass-Through Rate
on the respective Certificate Principal Balance of each such Certificate and
(2) the aggregate amount of any Realized Losses and LIBOR Carryover Amounts
incurred for any Distribution Date shall be allocated among the Class X/N
Interest on a PRO RATA basis based on, and to the extent of, one month's
interest at the then applicable Pass-Through Rate on the Notional Amount
thereof.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, without recourse for the benefit of the
Certificateholders all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in
and to (i) each Mortgage Loan identified on the Mortgage Loan Schedule,
including the related Cut-off Date Principal Balance, all interest accruing
thereon after the Cut-off Date and all collections in respect of interest and
principal due after the Cut-off Date; (ii) property which secured each such
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iii) its interest in any insurance policies in respect of the
Mortgage Loans; (iv) all proceeds of any of the foregoing; (v) the rights of
the Depositor under the Mortgage Loan Purchase Agreement and (vi) all other
assets included or to be included in the Trust Fund; PROVIDED, HOWEVER, so
long as the Servicer is an FHA Approved Mortgagee, the Commissioner of HUD
shall have no obligation to recognize or deal with any person other than the
Servicer with respect to FHA Insurance. Such assignment includes all interest
and principal due to the Depositor or the Servicer after the Cut off Date with
respect to the Mortgage Loans.
In connection with such transfer and assignment, the Seller, on
behalf of the Depositor, does hereby deliver or cause to be delivered to, and
deposit with the Trustee, or its designated agent (the "Custodian"), the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B) in
the following form: "Pay to the order of U.S. Bank National
Association, as Trustee under the Pooling and Servicing Agreement,
dated as of June 1, 2004, among Credit-Based Asset Servicing and
Securitization LLC, X.X. Xxxxxx Acceptance Corporation I, Xxxxxx
Loan Servicing LP and U.S. Bank National Association, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB4, without
recourse," or with respect to any lost Mortgage Note, an original
Lost Note Affidavit, together with a copy of the related Mortgage
Note;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon
or, if such Mortgage or power of attorney has been submitted for
recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted
for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A)
in blank or (B) to "U.S.
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Bank National Association, as Trustee under the Pooling and Servicing
Agreement, dated as of June 1, 2004, among Credit-Based Asset
Servicing and Securitization LLC, X.X. Xxxxxx Acceptance Corporation
I, Xxxxxx Loan Servicing LP and U.S. Bank National Association,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4,
without recourse";
(iv) an original or a certified copy of any intervening assignment of
Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance policy;
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vii) for each FHA Loan, the original Mortgage Insurance Certificate.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y)
has been lost or such public recording office has retained the original of
such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing
Date, in the case of missing Mortgages or Assignments or deliver such missing
document to the Trustee or the Custodian. If the Seller does not cure such
defect or deliver such missing document within such time period, the Seller
shall either repurchase or substitute for such Mortgage Loan in accordance
with Section 2.03.
The Servicer shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv)
hereof to be recorded. The Servicer shall be required to deliver such
assignments for recording within 30 days of the Closing Date. The Servicer
shall furnish the Trustee, or its designated agent, with a copy of each
Assignment of Mortgage submitted for recording. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Servicer shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.
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In the event that any Assignments of Mortgage are not recorded or
are improperly recorded, the Servicer shall have no liability for its failure
to receive or act on notices not received related to such Assignment of
Mortgage.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Servicer shall cause to
be completed such endorsements in the following form: "Pay to the order of
U.S. Bank National Association, as Trustee under the Pooling and Servicing
Agreement, dated as of June 1, 2004, among Credit-Based Asset Servicing and
Securitization LLC, X.X. Xxxxxx Acceptance Corporation I, Xxxxxx Loan
Servicing LP and U.S. Bank National Association, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4, without recourse."
The Depositor herewith delivers to the Trustee executed copies of
the Mortgage Loan Purchase Agreement.
The parties hereto understand and agree that it is not intended that
any Mortgage Loan be included in the Trust that is a "High-Cost Home Loan" as
defined by the Homeownership and Equity Protection Act of 1994 or any other
applicable predatory or abusive lending laws.
Section 2.02 Acceptance by the Trustee.
The Trustee acknowledges the receipt of, subject to the provisions
of Section 2.01 and subject to the review described below and any exceptions
noted on the exception report described in the next paragraph below, the
documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage
File, and that it holds or will hold all such assets and such other assets
included in the definition of "Trust Fund" in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any document delivered after the
Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to
certify (or cause the Custodian to certify) in substantially the form attached
hereto as Exhibit F-1 that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents required to be delivered to
it pursuant to Section 2.01 of this Agreement are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged or
torn and relate to such Mortgage Loan, (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), (3), (5) (13) and (26) (but only as to
48
whether the Mortgage Loan as a Prepayment Charge) of the Mortgage Loan
Schedule accurately reflects information set forth in the Mortgage File, (iv)
all Assignments of Mortgage or intervening assignments of mortgage, as
applicable, have been submitted for recording and (v) each Mortgage Note has
been endorsed as provided in Section 2.01(i) of this Agreement and each
Mortgage has been assigned in accordance with Section 2.01(iii) of this
Agreement. It is herein acknowledged that, in conducting such review, the
Trustee (or the Custodian, as applicable) is under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate
for the represented purpose or that they have actually been recorded or that
they are other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Trustee
shall deliver (or cause the Custodian to deliver) to the Depositor and the
Servicer a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trustee, upon its
notification by the Custodian, if applicable, shall so notify the Seller, the
Depositor and the Servicer. In addition, upon the discovery by the Seller,
Depositor, the Trustee or the Servicer (or upon receipt by the Trustee of
written notification of such breach) of a breach of any of the representations
and warranties made by the Seller in the related Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens
and encumbrances, from the Depositor to the Trustee and that such property not
be part of the Depositor's estate or property of the Depositor in the event of
any insolvency by the Depositor. In the event that such conveyance is deemed
to be, or to be made as security for, a loan, the parties intend that the
Depositor shall be deemed to have granted and does hereby grant to the
Trustee, on behalf of the Trust, a first priority perfected security interest
in all of the Depositor's right, title and interest in and to the Mortgage
Loans and the Related Documents, and that this Agreement shall constitute a
security agreement under applicable law.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or
of the breach by the Seller of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any
Mortgage Loan which materially adversely affects the value of such Mortgage
Loan or the interest therein of the Certificateholders, the Trustee (or the
Custodian, as applicable) shall promptly notify the Seller and the Servicer of
such defect,
49
missing document or breach and request that the Seller deliver such
missing document or cure such defect or breach within 120 days or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments
from the date the Seller was notified of such missing document, defect or
breach, and if the Seller does not deliver such missing document or cure such
defect or breach in all material respects during such period, the Trustee
shall enforce the Seller's obligation under the Mortgage Loan Purchase
Agreement and inform the Seller of its obligation to repurchase such Mortgage
Loan from the Trust Fund at the Purchase Price on or prior to the
Determination Date following the expiration of such 120 day period (subject to
Section 2.03(e)); provided that, in connection with any such breach that could
not reasonably have been cured within such 120 day or 150 day period, if the
Seller shall have commenced to cure such breach within such 120 day or 150 day
period, the Seller shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Mortgage Loan Purchase Agreement. The Purchase Price for the repurchased
Mortgage Loan shall be deposited in the Collection Account, and the Trustee,
upon receipt of written certification from the Servicer of such deposit, shall
release to the Seller the related Mortgage File and shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Seller shall furnish to it and as shall be
necessary to vest in the Seller any Mortgage Loan released pursuant hereto and
the Trustee shall have no further responsibility with regard to such Mortgage
File. In lieu of repurchasing any such Mortgage Loan as provided above, the
Seller may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a Defective Mortgage Loan) and substitute one or
more Eligible Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d). It is understood and agreed that the
obligation of the Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
omission, defect or breach available to the Trustee on behalf of the
Certificateholders.
(b) [Reserved].
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation,
warranty or covenant of the Servicer set forth in Section 2.05 which
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan, the Servicer shall cure such breach in all material
respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the last Business Day that is within two years after the Closing
Date. As to any Defective Mortgage Loan for which the Seller substitutes an
Eligible Substitute Mortgage Loan or Loans, such substitution shall be
effected by the Seller delivering to the Trustee, for such Eligible Substitute
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Eligible Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution
Adjustment Amount (as described below), if any, in connection with such
substitution. The Trustee shall acknowledge receipt for such Eligible
Substitute Mortgage Loan or Loans and, within ten Business Days
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thereafter, shall review such documents as specified in Section 2.02 and
deliver (or cause the Custodian to deliver) to the Servicer, with respect
to such Eligible Substitute Mortgage Loan or Loans, a certification
substantially in the form attached hereto as Exhibit F-1, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Trustee shall deliver (or cause the Custodian to deliver) to the Servicer a
certification substantially in the form of Exhibit F-2 hereto with respect to
such Eligible Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Eligible
Substitute Mortgage Loans in the month of substitution are not part of the
Trust Fund and will be retained by the Seller. For the month of substitution,
distributions to Certificateholders will reflect the collections and
recoveries in respect of such Defective Mortgage Loan in the Collection Period
preceding the month of substitution and the Depositor or the Seller, as the
case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Defective Mortgage Loan. The Seller shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to
reflect the removal of such Defective Mortgage Loan from the terms of this
Agreement and the substitution of the Eligible Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee and the Custodian. Upon such substitution, such Eligible Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Seller, the Mortgage Loan Purchase Agreement,
including, in the case of a substitution effected by the Seller all applicable
representations and warranties thereof included in the Mortgage Loan Purchase
Agreement and all applicable representations and warranties thereof set forth
in Section 2.04, in each case as of the date of substitution.
For any month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage
Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage
Loan, of the principal balance thereof as of the date of substitution,
together with one month's interest on such principal balance at the applicable
Net Mortgage Interest Rate. On the date of such substitution, the Seller will
deliver or cause to be delivered to the Servicer for deposit in the Collection
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or
Loans and certification by the Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Seller shall deliver to it and as shall be
necessary to vest therein any Defective Mortgage Loan released pursuant
hereto.
In addition, the Seller shall obtain at its own expense and deliver
to the Trustee an Opinion of Counsel to the effect that such substitution will
not cause (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860F(a)(l) of the Code or on "contributions after the startup date"
under Section 860G(d)(l) of the Code, or (b) any REMIC to fail to qualify as a
REMIC at any time that any Certificate is outstanding. If such Opinion of
Counsel can not be delivered, then such substitution may only be effected at
such time as the required Opinion of Counsel can be given.
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(e) Upon discovery by the Seller, the Servicer or the Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or, subject to
the limitations set forth in Section 2.03(d), substitute one or more Eligible
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. In addition, upon discovery that a Mortgage Loan is defective
in a manner that would cause it to be a "defective obligation" within the
meaning of Treasury regulations relating to REMICs, the Seller shall cure the
defect or make the required purchase or substitution no later than 90 days
after the discovery of the defect. Any such repurchase or substitution shall
be made in the same manner as set forth in Section 2.03(a), if made by the
Seller. The Trustee shall reconvey to the Seller the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to
the custody, acceptance, inspection and release of the Mortgage Files pursuant
to Sections 2.01, 2.02 and 2.03 and preparation and delivery of the
certifications in the form of Exhibit F-1, Exhibit F-2 and Exhibit F-3 shall
be performed by the Custodian pursuant to the terms and conditions of the
Custodial Agreement. The fees and expenses of the Custodian shall be paid by
the Servicer.
Section 2.04 Representations and Warranties of the Seller with
Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee
for the benefit of the Certificateholders and the
Depositor that as of the Closing Date or as of such other date specifically
provided herein:
(a) The representations and warranties made by the Seller pursuant
to Section 3.01 of the Mortgage Loan Purchase Agreement are hereby being made
to the Trustee and are true and correct as of the Closing Date.
(b) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved the application of the Seller's underwriting
standards or some assessment of the Mortgagor's ability to repay the Modified
Mortgage Loan.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Seller's knowledge or as to
which the Seller has no knowledge, if it is discovered by the Depositor, the
Seller, the Servicer, the Trustee or the Custodian that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest
therein of the Certificateholders then, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or
52
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Upon discovery by the Depositor, the Seller, the Servicer, the
Trustee or the Custodian of a breach of any of the representations and
warranties contained in this Section that materially and adversely affects the
value of any Mortgage Loan or the interest therein of the Certificateholders,
the party discovering the breach shall give prompt written notice to the
others and in no event later than two Business Days from the date of such
discovery. Within ninety days of its discovery or its receipt of notice of any
such missing or materially defective documentation or any such breach of a
representation or warranty, the Seller shall promptly deliver such missing
document or cure such defect or breach in all material respects, or in the
event such defect or breach cannot be cured, the Seller shall repurchase the
affected Mortgage Loan or cause the removal of such Mortgage Loan from the
Trust Fund and substitute for it one or more Eligible Substitute Mortgage
Loans, in either case, in accordance with Section 2.03.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the Mortgage Files to
the Trustee and shall inure to the benefit of the Certificateholders and the
Depositor notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Seller set
forth in Section 2.03(a) to cure, substitute for or repurchase a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement constitute the sole remedies
available to the Depositor and to the Certificateholders or to the Trustee on
their behalf respecting a breach of the representations and warranties
contained in this Section 2.04.
Section 2.05 Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of the Certificateholders and to the Depositor that
as of the Closing Date or as of such date specifically provided herein:
(i) The Servicer is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry on its business as now being conducted,
except for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse
effect on the ability of the Servicer to conduct its business as it is
presently conducted, and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business of
the type conducted by the Servicer or to ensure the enforceability or
validity of each Mortgage Loan; the Servicer has the power and authority
to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Servicer,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally; and all requisite corporate action has been
53
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the certificate of
formation or the partnership agreement of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Servicer or its property is subject, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject;
(iii) The Servicer is an approved seller/servicer of conventional
mortgage loans for Xxxxxx Xxx, and is an FHA Approved Mortgagee in good
standing to service mortgages and has not been suspended as a mortgagee
or servicer by the FHA and has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans. The Servicer is, and shall remain for as long
as it is servicing the Mortgage Loans hereunder, in good standing as a
FHA Approved Mortgagee and to service mortgage loans for HUD, Xxxxxx Mae
or Xxxxxxx Mac, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to
comply with HUD, Xxxxxx Mae, Xxxxxxx Mac or FHA eligibility requirements
or which would require notification to any of HUD, Xxxxxx Mae, Xxxxxxx
Mac or FHA;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and
will constitute valid, legal and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy laws and
general principles of equity;
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions
54
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders, if any, that have been obtained;
(viii) Neither this Agreement nor any information, certificate of an
officer, statement furnished in writing or report delivered to the
Trustee by the Servicer in connection with the transactions contemplated
hereby contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary in order to make
the statements contained therein, in light of the circumstances under
which they were made, not misleading; and
(ix) The Servicer has accurately and fully reported, and will
continue to accurately and fully report, its borrower credit files to
each of the credit repositories in a timely manner.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the Trustee,
the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the Seller or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(ii) Immediately prior to the sale and assignment by the Depositor
to the Trustee on behalf of the Trust of each Mortgage Loan, the
Depositor had good and marketable title to each Mortgage Loan (insofar as
such title was conveyed to it by the Seller) subject to no prior lien,
claim, participation interest, mortgage, security interest, pledge,
charge or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf of
the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to the
Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
55
(v) The Depositor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own its assets and
conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in
any violation of the provisions of the articles of incorporation or
by-laws of the Depositor or, to the best of the Depositor's knowledge
without independent investigation, any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as would
not have a material adverse effect on the ability of the Depositor to
perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for
the issuance of the Certificates, or the consummation by the Depositor of
the other transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
(a) may be required under State securities or Blue Sky laws, (b) have
been previously obtained or (c) the failure of which to obtain would not
have a material adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement;
and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation
by the Depositor of any of the transactions contemplated by this
Agreement, as the case may be; (d) which might materially and
56
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement.
Section 2.07 Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders that as of the Closing Date or as
of such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which
the failure to so qualify would have a material adverse effect on (a) its
business, properties, assets or condition (financial or other), (b) the
performance of its obligations under this Agreement, (c) the value or
marketability of the Mortgage Loans, or (d) its ability to foreclose on
the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the Seller's
legal, valid and binding obligations enforceable in accordance with its
terms, except as enforcement of such terms may be limited by (1)
bankruptcy, insolvency, reorganization, receivership, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies, (2) general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) or (3) public policy considerations underlying the
securities laws, to the extent that such policy considerations limit the
enforceability of the provisions of this Agreement which purport to
provide indemnification from securities laws liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is presently conducted, except for such licenses,
certificates and permits the absence of which, individually or in the
aggregate, would not have a material adverse effect on the ability of the
Seller to conduct its business as it is presently conducted. It is not
required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration
with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or constitute
a default under, any provision
57
of any existing law or regulation or any order or decree of any
court applicable to the Seller or any of its properties or any provision
of its Limited Liability Company Agreement, or constitute a material
breach of, or result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to any mortgage,
indenture, contract or other agreement to which it is a party or by which
it may be bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, nor is
the Seller aware of any pending insolvency.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect
to any order or decree of any court, or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction,
which violation would materially and adversely affect the Seller's
condition (financial or otherwise) or operations or any of the Seller's
properties, or materially and adversely affect the performance of any of
its duties hereunder.
(ix) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any
court, administrative agency or other tribunal (i) that, if determined
adversely, would prohibit the Seller from entering into this Agreement,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (iii) that, if determined adversely,
would prohibit or materially and adversely affect the Seller's
performance of any of its respective obligations under, or the validity
or enforceability of, this Agreement.
(x) The Seller did not transfer the Mortgage Loans to the Depositor
with any intent to hinder, delay or defraud any of its creditors.
(xi) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller to the Depositor are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 2.08 Covenants of the Seller.
(a) 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
58
or suffer to exist any lien on any Mortgage Loan, or any interest therein; the
Seller will notify the Trustee, as assignee of the Depositor, of the existence
of any lien on any Mortgage Loan immediately upon discovery thereof, and the
Seller will defend the right, title and interest of the Trust, as assignee of
the Depositor, in, to and under the Mortgage Loans, against all claims of
third parties claiming through or under the Seller; PROVIDED, HOWEVER, that
nothing in this Section 2.08 shall prevent or be deemed to prohibit the Seller
from suffering to exist upon any of the Mortgage Loans any liens for municipal
or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the Seller
shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
(b) The Seller hereby covenants that neither it nor any Affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller
nor any Affiliate of the Seller shall be deemed to directly solicit any
Mortgagor if the Seller responds to a request from a Mortgagor regarding a
refinancing or if the Mortgagor receives marketing materials which are
generally disseminated.
Section 2.09 Conveyance of REMIC 1 Regular Interests and Acceptance
of REMIC 1 by the Trustee; Issuance of Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the assets described in the definition of REMIC 1 for the
benefit of the holders of the REMIC 1 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-1
Interest). The Trustee acknowledges receipt of the assets described in the
definition of REMIC 1 and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the REMIC 1 Regular
Interests and the Class R Certificates (in respect of the Class R-1 Interest).
The interests evidenced by the Class R-1 Interest, together with the REMIC 1
Regular Interests, constitute the entire beneficial ownership interest in
REMIC 1.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the
holders of the Regular Certificates, the REMIC 2 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-2
Interest). The Trustee acknowledges receipt of the REMIC 1 Regular Interests
and declares that it holds and will hold the same in trust for the exclusive
use and benefit of the holders of the Regular Certificates, the REMIC 2
Regular Interests and the Class R Certificates (in respect of the Class R-2
Interest). The interests evidenced by the Class R-2 Interest, together with
the Certificates and the REMIC 2 Regular Interests, constitute the entire
beneficial ownership interest in REMIC 2.
(c) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01
and Section 2.02 and (ii) the assignment and delivery to the Trustee of REMIC
2 (including the Residual Interest therein represented by the Class R-2
Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.10(b), the Trustee, pursuant to the written request of the Depositor
executed by an
59
officer of the Depositor, has executed, authenticated and delivered to or upon
the order of the Depositor, the Class R Certificates in authorized
denominations evidencing the Class R-1 Interest and the Class R-2 Interest,
the Class A Certificates, the Class M-1 Certificates, the Class M-2
Certificates, the Class M-3 Certificates, the Class B-2 Interest, the Class
B-2 Certificates, the Class B-3 Certificates, the Class B-3 Interest, the
Class B-4 Interest and the Class X/N Interest.
Section 2.10 Conveyance of Class B-2 Interest and Acceptance of
REMIC 3 by the Trustee; Issuance of the Class B-2
Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class B-2 Interest for the benefit of the holders of
the Class B-2 Certificates. The Trustee acknowledges receipt of the Class B-2
Interest (which is uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the
Class B-2 Certificates. The Class R-3 Interest, together with the Class B-2
Certificates, constitute the entire beneficial ownership interest in REMIC 3.
(b) In exchange for the Class B-2 Interest and, concurrently with
the assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class
B-2 Certificates in authorized denominations evidencing (together with the
Class R-3 Interest) the entire beneficial ownership interest in REMIC 3.
(c) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 3 (including the Residual Interest therein represented by the Class
R-3 Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.10(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-3 Interest.
Section 2.11 Conveyance of Class B-3 Interest and Acceptance of
REMIC 4 by the Trustee; Issuance of the Class
B-3 Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class B-3 Interest for the benefit of the holders of
the Class B-3 Certificates. The Trustee acknowledges receipt of the Class B-3
Interest (which is uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the
Class B-3 Certificates. The Class R-4 Interest, together with the Class B-3
Certificates, constitute the entire beneficial ownership interest in REMIC 4.
(b) In exchange for the Class B-3 Interest and, concurrently with
the assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the
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order of the Depositor, the Class B-3 Certificates in authorized denominations
evidencing (together with the Class R-4 Interest) the entire beneficial
ownership interest in REMIC 4.
(c) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 4 (including the Residual Interest therein represented by the Class
R-4 Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.11(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-4 Interest.
Section 2.12 Conveyance of Class B-4 Interest and Acceptance of
REMIC 5 by the Trustee; Issuance of the Class B-4
Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class B-4 Interest for the benefit of the holders of
the Class B-4 Certificates. The Trustee acknowledges receipt of the Class B-4
Interest (which is uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the
Class B-4 Certificates. The Class R-5 Interest, together with the Class B-4
Certificates, constitute the entire beneficial ownership interest in REMIC 5.
(b) In exchange for the Class B-4 Interest and, concurrently with
the assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Class
B-4 Certificates in authorized denominations evidencing (together with the
Class R-5 Interest) the entire beneficial ownership interest in REMIC 5.
(c) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 5 (including the Residual Interest therein represented by the Class
R-5 Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.12(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R-5 Interest.
Section 2.13 Conveyance of Class X/N Interest and Acceptance of
REMIC 6 by the Trustee; Issuance of the Class X/N
Certificates.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust
to the Trustee without recourse all the right, title and interest of the
Depositor in and to the Class X/N Interest for the benefit of the holders of
the Class X/N Certificates. The Trustee acknowledges receipt of the Class X/N
Interest (which is uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the holders of the
Class X/N Certificates. The Class R-5 Interest, together with the Class X
Certificates, constitute the entire beneficial ownership interest in REMIC 6.
(b) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC 6 (including the Residual Interest therein represented by the Class
R-6 Interest) and the acceptance by the Trustee thereof, pursuant to Section
2.12(a), the Trustee, pursuant to the
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written request of the Depositor executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the Depositor,
the Class R-6 Interest.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage servicers, and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement including, in the case of FHA Loans, taking all actions that a
mortgagee is permitted or required to take by the FHA (the "Servicing
Standards").
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Certificateholders; PROVIDED, HOWEVER, that the Servicer shall not make
future advances and (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) the Servicer shall not permit any modification with respect to
any Mortgage Loan that would (i) change the Mortgage Interest Rate, defer or
forgive the payment thereof of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or
extend the final maturity date with respect to such Mortgage Loan, (ii) in the
case of FHA Loans, affect the FHA Insurance Contract with respect to such
Mortgage Loan, (iii) affect adversely the status of any REMIC as a REMIC or
(iv) cause any REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions. Notwithstanding the
foregoing, the Servicer shall not permit any modification with respect to any
Mortgage Loan that would both (x) effect an exchange or reissuance of such
Mortgage Loan under Section 1.860G-2(b) of the Treasury Regulations and (y)
cause any REMIC constituting part of the Trust Fund to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the Startup Day under the REMIC Provisions. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered to execute and deliver on behalf of itself,
and the Trustee, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Property. The
Servicer shall make all required Servicing Advances and shall service and
administer the Mortgage Loans in accordance with Applicable Regulations, and
shall provide to the Mortgagor any reports required to be provided to them
thereby. If reasonably required by the Servicer, the Trustee shall furnish the
Servicer with a power of attorney substantially in the form of Exhibit P
hereto and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement and the
Trustee shall have no liability with respect to any misuse of such power of
attorney and shall be indemnified by the
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Servicer for any costs, liabilities or expenses incurred by the Trustee in
connection therewith. The Trustee agrees to provide such power of attorney
within ten (10) days of the Servicer's request therefor.
Notwithstanding anything in this Agreement to the contrary, the
Servicer shall be prohibited from foreclosing on any Mortgage Loan based on
the delinquency status thereof as of the Cut-off Date.
In servicing and administering FHA Loans, the Servicer shall comply
strictly with the National Housing Act and the FHA Regulations, and
administrative guidelines issued thereunder or pursuant thereto (insofar as
the same apply to any Mortgage Loan) and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and
under each Mortgage including the timely giving of notices, the essence hereof
being that the full benefits of each FHA Insurance Contract inure to the
Trustee, on behalf of the Certificateholders.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted
mortgage servicing practices of prudent lending institutions, the FHA
Insurance Contracts, where applicable, and the Certificateholders' reliance on
the Servicer.
The Servicer shall give prompt notice to the Trustee of any action,
of which the Servicer has actual knowledge, which action purports to (i)
assert a claim against the Trust Fund or (ii) assert jurisdiction over the
Trust Fund.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may
not waive any Prepayment Charge or portion thereof required by the terms of
the related Mortgage Note unless (i) the Servicer determines that such waiver
would maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, (ii) (A) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary payment, or
(B) the enforceability is otherwise limited or prohibited by applicable law or
(iii) the Servicer has not been provided with information sufficient to enable
it to collect the Prepayment Charge. In the event of a Principal Prepayment in
full with respect to any Mortgage Loan, the Servicer shall deliver to the
Trustee an Officer's Certificate substantially in the form of Exhibit N no
later than the date on which the Servicer delivers the Remittance Report to
the Trustee and the Trustee will make such Officer's Certificate available on
its website to the Class X Certificateholders. If the Servicer has waived or
does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full due to any action or omission of the Servicer,
other than as provided above, the Servicer shall, within 90 days of the date
on which the Principal Prepayment in full is remitted to the Trustee, deliver
to the Trustee the amount of such Prepayment Charge (or such portion thereof
as had been waived for deposit) into the Distribution Account for distribution
in accordance with the terms of this Agreement.
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The Trustee shall make available on its website to the Depositor and
the owner of the Class N and Class X Certificates, on a monthly basis, a
statement setting forth the amounts received with respect to Prepayment
Charges.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest
on all Mortgage Loans are paid in full, the Servicer will diligently collect
all payments due under each Mortgage Loan when the same shall become due and
payable and shall, to the extent such procedures shall be consistent with this
Agreement and Applicable Regulations, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Further, the Servicer will take special care in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums, and
all other charges that, as provided in the Mortgage, will become due and
payable to that end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Conventional Mortgage
Loan is not paid when the same becomes due and payable, or in the event the
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interest of
the Certificateholders. In the event that any payment due under any FHA Loan
becomes delinquent, the Servicer shall take all such actions as are in the
best interests of the Certificateholders and permitted under any applicable
FHA loss mitigation proceedings, including, but not limited to, requesting the
FHA to accept an assignment of such FHA Loan, and, upon the Servicer's
determination that foreclosure is in the best interest of the
Certificateholders, commencing foreclosure proceedings. With respect to any
defaulted Mortgage Loan, the Servicer shall have the right to review the
status of the related forbearance plan and, subject to the second paragraph of
Section 3.01, may modify such forbearance plan; including, extending the
Mortgage Loan repayment date for a period of one year or reducing the Mortgage
Interest Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs
and consistent with Applicable Regulations and the servicing standards set
forth in the Xxxxxx Xxx Guide, including, without limitation, advancing funds
for the payment of taxes and insurance premiums with respect to first lien
Mortgage Loans.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property if, as a result of any
such action, the Trust Fund would be
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considered to hold title to, to be a mortgagee-in-possession of, or to be an
owner or operator of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended from time to time, or any comparable law, unless the Servicer has
also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest
of the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if
any such materials are present for which such action could be required, that
it would be in the best economic interest of the Certificateholders to take
such actions with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.05(ii).
If the Servicer determines, as described above, that it is in the
best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes, or petroleum-based materials affecting any such Mortgaged
Property, then the Servicer shall take such action as it deems to be in the
best economic interest of the Certificateholders. The cost of any such
compliance, containment, cleanup or remediation shall be advanced by the
Servicer, subject to the Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.05(ii).
Section 3.04 Collection Account and Distribution Account.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more
Collection Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily
basis within two Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
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(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all proceeds from a Final Recovery Determination;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(vi) all Subsequent Recoveries; and
(vii) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). The foregoing requirements for
deposit from the Collection Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of late payment charges, prepayment charges that are not Prepayment
Charges, and assumption fees need not be deposited by the Servicer in the
Collection Account.
(b) On behalf of the Trust Fund and the Trustee, the Trustee shall
establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), held in trust for the benefit of the
Certificateholders. On behalf of the Trust Fund, the Servicer shall deliver to
the Trustee in immediately available funds for deposit in the Distribution
Account by the close of business New York time on the Servicer Remittance
Date, that portion of the Available Funds (calculated without regard to the
references in the definition thereof to amounts that may be deposited to the
Distribution Account from a different source as provided herein) then on
deposit in the Collection Account.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Permitted Investments in accordance with the provisions set
forth in Section 3.25. The Servicer shall give notice to the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trustee shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and
prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
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shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any Prepayment Charges or amounts in connection with the
waiver of such Prepayment Charges, in each case required to be deposited
pursuant to Section 3.01;
(iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 2.03, 3.04, 3.15, 3.16, 3.23 or 4.07; and
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own
funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall notify the Servicer of such receipt and deposit such
funds in the Distribution Account, subject to withdrawal thereof as permitted
hereunder.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the
Collection Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.04(d);
(ii) to reimburse itself for (x) Advances and Servicing Advances;
the Servicer's right to reimburse itself pursuant to this subclause (ii)
being limited to amounts received on the related Mortgage Loan which
represent payments of (a) principal and/or interest respecting which any
such Advance was made or (b) Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds respecting which any such Servicing Advance was made
or (y) any unreimbursed Advances made pursuant to Section 4.07(b) to the
extent of funds held in the Collection Account for future distribution
that were not included in Available Funds for the preceding Distribution
Date;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed Advances to the extent that
such amounts are deemed to be Nonrecoverable Advances, and to reimburse
itself for such amounts to the extent that such amounts are
nonrecoverable from the disposition of REO Property pursuant to Section
3.03 or Section 3.13 hereof;
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(iv) to reimburse itself for any amounts paid pursuant to Section
3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b)
the Servicing Fee from that portion of any payment or recovery as to
interest to a particular Mortgage Loan to the extent not retained
pursuant to Section 3.04(ii);
(vi) to pay or reimburse itself or any other party for any amounts
payable or paid pursuant to Section 3.26 or Section 6.03 (and not
otherwise previously reimbursed); and
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time
deposit or demand accounts. A copy of such letter agreement shall be furnished
to the Trustee upon request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account or Accounts on a
daily basis within two Business Days of receipt, and retain therein, (i) all
Escrow Payments collected on account of the Mortgage Loans, for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement, and (ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid
to the Mortgagor and, to the extent required by the related Mortgage Loan or
Applicable Regulations, the Servicer shall pay interest on escrowed funds to
the Mortgagor notwithstanding that the Escrow Account is non-interest bearing
or that interest paid thereon is insufficient for such purposes.
Section 3.07 Permitted Withdrawals from Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i)
to effect timely payments of ground rents, taxes, assessments, water rates,
fire, flood and hazard insurance premiums, and comparable items, (ii) to
reimburse the Servicer for any Servicing Advance made
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by the Servicer with respect to a related Mortgage Loan but only from amounts
received on the related Mortgage Loan which represent late payments or Late
Collections of Escrow Payments thereunder, (iii) to refund to the Mortgagor
any funds as may be determined to be overages, (iv) for transfer to the
Collection Account in accordance with the terms of this Agreement, (v) for
application to restoration or repair of the Mortgaged Property, (vi) to pay to
the Servicer, or to the Mortgagor to the extent required by the related
Mortgage Loan or Applicable Regulations, any interest paid on the funds
deposited in the Escrow Account, (vii) to clear and terminate the Escrow
Account on the termination of this Agreement, (viii) to transfer to the
Collection Account any insurance proceeds, or (ix) in the case of FHA Loans,
for transfer to the Collection Account, fire and hazard insurance proceeds and
Escrow Payments with respect to any Mortgage Loan where the FHA has directed
application of such funds as a credit against the proceeds of the FHA
Insurance Contract. As part of its servicing duties, the Servicer shall pay to
the Mortgagor interest on funds in the Escrow Account, to the extent required
by the related Mortgage Loan or Applicable Regulations, and to the extent that
interest earned on funds in the Escrow Account is insufficient, shall pay such
interest from its own funds, without any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder.
With respect to each first lien Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and fire, flood and hazard insurance coverage and shall
obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or Applicable Regulations. To the
extent that a Mortgage does not provide for Escrow Payments, the Servicer (i)
shall determine whether any such payments are made by the Mortgagor in a
manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and
(ii) shall ensure that all insurance required to be maintained on the
Mortgaged Property pursuant to this Agreement is maintained. If any such
payment has not been made and the Servicer receives notice of a tax lien with
respect to the Mortgage Loan being imposed, the Servicer will, to the extent
required to avoid loss of the Mortgaged Property, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property. The
Servicer assumes full responsibility for the payment of all such bills and
shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow
Payments and shall make Servicing Advances from its own funds to effect such
payments.
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Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account or the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee and the Depositor, a
certification or letter agreement, as the case may be, as required pursuant to
Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each first lien
Mortgage Loan fire and hazard insurance with extended coverage as is customary
in the area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (i) the amount necessary to fully compensate for
any damage or loss to the improvements which are a part of such property on a
replacement cost basis, (ii) the Principal Balance of the Mortgage Loan, in
each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the
amount required under applicable HUD/FHA regulations. If the Mortgaged
Property is in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (i) the
Principal Balance of the Mortgage Loan, (ii) the maximum insurable value of
the improvements securing such Mortgage Loan or (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended. The Servicer shall also maintain on the REO Property for the
benefit of the Certificateholders, (x) fire and hazard insurance with extended
coverage in an amount which is at least equal to the replacement cost of the
improvements which are a part of such property, (y) public liability insurance
and, (z) to the extent required and available under the Flood Disaster
Protection Act of 1973, as amended, flood insurance in an amount as provided
above. Any amounts collected by the Servicer under any such policies other
than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released
to the Mortgagor in accordance with the Servicer's normal servicing
procedures, shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05. It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by the
Servicer or the Mortgagor or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to such Applicable Regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable
to the Servicer and shall provide for at least thirty days prior written
notice of any cancellation, reduction in the amount of or material change in
coverage to the Servicer. The Servicer shall not interfere with the
Mortgagor's freedom of choice in selecting either his insurance carrier or
agent, PROVIDED, HOWEVER, that the Servicer shall not accept any such
insurance policies from insurance companies unless such companies currently
reflect a general policy rating of B:VI or better in Best's Key Rating Guide
and are licensed to do business in the state wherein the property subject to
the policy is located.
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Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that has a general policy rating of B:VI or better
in Best's Key Rating Guide insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 3.10 and otherwise complies
with all other requirements of Section 3.10, it shall conclusively be deemed
to have satisfied its obligations as set forth in Section 3.10, it being
understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy
complying with Section 3.10, and there shall have been a loss which would have
been covered by such policy, deliver to the Trustee for deposit in the
Distribution Account the amount not otherwise payable under the blanket policy
because of such deductible clause, which amount shall not be reimbursable to
the Servicer from the Trust Fund. In connection with its activities as
servicer of the Mortgage Loans, the Servicer agrees to prepare and present, on
behalf of the Trustee, claims under any such blanket policy in a timely
fashion in accordance with the terms of such policy. Upon request of the
Trustee, the Servicer shall cause to be delivered to the Trustee a certified
true copy of such policy and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without thirty
days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies on all officers,
employees or other persons acting in any capacity with regard to the Mortgage
Loans to handle funds, money, documents and papers relating to the Mortgage
Loans. The Fidelity Bond and errors and omissions insurance shall be in the
form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such persons. Such Fidelity Bond shall
also protect and insure the Servicer against losses in connection with the
failure to maintain any insurance policies required pursuant to this Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 3.12 requiring the Fidelity Bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by Xxxxxx Mae in the Xxxxxx Xxx MBS Selling and Servicing Guide or by Xxxxxxx
Mac in the Xxxxxxx Mac Servicer's Guide. Upon request of the Trustee, the
Servicer shall cause to be delivered to the requesting party a certified true
copy of the Fidelity Bond and errors and omissions insurance policy and a
statement from the surety and the insurer that such Fidelity Bond and errors
and omissions insurance policy shall in no event be terminated or materially
modified without thirty days' prior written notice to the Trustee.
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Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Servicer) in the name of the Trustee, on behalf of the
Certificateholders, or in the event the Trustee is not authorized or permitted
to hold title to real property in the state where the REO Property is located,
or would be adversely affected under the "doing business" or tax laws of such
state by so holding title, the deed or certificate of sale shall be taken in
the name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Servicer from an attorney duly licensed to practice
law in the state where the REO Property is located. Any Person or Persons
holding such title other than the Trustee shall acknowledge in writing that
such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end
of the third calendar year beginning after the year of its acquisition by the
Trust Fund for purposes of Section 860G(a)(8) of the Code or, at the expense
of the Trust Fund, request from the Internal Revenue Service, more than 60
days before the day on which the above-mentioned grace period would otherwise
expire, an extension of the above-mentioned grace period, unless the Servicer
obtains an Opinion of Counsel, addressed to the Servicer and the Trustee, to
the effect that the holding by the Trust Fund of such REO Property subsequent
to such period will not: (i) result in the imposition of any tax on
"prohibited transactions" as defined in Section 860F of the Code; or (ii)
cause any REMIC constituting any part of the Trust Fund to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such REO Property (subject to any conditions
contained in such Opinion of Counsel). The Servicer shall be entitled to be
reimbursed from the Collection Account for any costs incurred in obtaining
such Opinion of Counsel, as provided in Section 3.05.
Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would: (i) cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code; or (ii) subject any REMIC
constituting part of the Trust Fund to the imposition of any federal income
taxes on the income earned from such REO Property, including any taxes imposed
by reason of Sections 860F or 860G(c) of the Code, unless the Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose
of its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under
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the REMIC Provisions. The Servicer shall cause each REO Property to be
inspected promptly upon the acquisition of title thereto and shall cause each
REO Property to be inspected at least annually thereafter. The Servicer shall
make or cause to be made a written report of each such inspection. Such
reports shall be retained in the Mortgage Servicing File and copies thereof
shall be forwarded by the Servicer to the Trustee upon request. The Servicer
shall attempt to sell the same (and may temporarily rent the same) on such
terms and conditions as the Servicer deems to be in the best interest of the
Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within two Business Days of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the related REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 3.10 hereof and the fees of any managing agent
acting on behalf of the Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating
statement shall be accompanied by such other information as the Trustee shall
reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Certificateholders. If as of the date title to any REO
Property was acquired by the Servicer there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Servicer, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Servicer as provided above, shall be deposited in the
Collection Account for distribution on the succeeding Servicer Remittance Date
in accordance with Section 4.01 and Section 4.02.
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-On-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; PROVIDED,
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HOWEVER, that the Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. An Opinion of Counsel at the expense of the
Servicer (which expense shall constitute a Servicing Advance) delivered to the
Trustee and the Depositor to the foregoing effect shall conclusively establish
the reasonableness of such belief. In such event, the Servicer shall make
reasonable efforts to enter into an assumption and modification agreement with
the Person to whom such property has been or is about to be conveyed, pursuant
to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer
is authorized to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability
and such Person is substituted as Mortgagor and becomes liable under the Note.
The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Servicer
shall notify the Trustee that any such assumption or substitution agreement
has been completed by forwarding to the Trustee (or the Custodian, as the case
may be) the original copy of such assumption or substitution agreement
(indicating the Mortgage File to which it relates) which copy shall be added
by the Trustee (or the Custodian, as the case may be) to the related Mortgage
File and which shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. The Servicer shall be responsible for recording any such
assumption or substitution agreements. In connection with any such assumption
or substitution agreement, the Monthly Payment on the related Mortgage Loan
shall not be changed but shall remain as in effect immediately prior to the
assumption or substitution, the stated maturity or outstanding principal
amount of such Mortgage Loan shall not be changed nor shall any required
monthly payments of principal or interest be deferred or forgiven. Any fee
collected by the Servicer for consenting to any such conveyance or entering
into an assumption or substitution agreement shall be retained by or paid to
the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Servicer
may be restricted by law from preventing, for any reason whatsoever.
Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Servicer shall make Mortgage Interest
Rate adjustments for each Adjustable-Rate Mortgage Rate Loan in compliance
with the requirements of the related Mortgage and Mortgage Note and Applicable
Regulations. The Servicer shall execute and deliver the notices required by
each Mortgage and Mortgage Note and Applicable Regulations regarding Mortgage
Interest Rate adjustments. The Servicer also shall provide timely notification
to the Trustee of all applicable data and information regarding such Mortgage
Interest Rate adjustments and the Servicer's methods of implementing such
Mortgage Interest Rate adjustments. Upon the discovery by the Servicer or the
Trustee that the Servicer has failed to adjust or has incorrectly adjusted a
Mortgage Interest Rate or a Monthly Payment pursuant to the terms of the
related Mortgage Note and Mortgage, the Servicer shall deliver to the Trustee
for deposit in the Distribution Account from its own funds the amount of any
interest loss caused
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thereby without reimbursement therefor; PROVIDED, HOWEVER, the Servicer shall
be held harmless with respect to any Mortgage Interest Rate adjustments made
by any servicer prior to the Servicer.
Section 3.16 Optional Purchases of Mortgage Loans by Servicer.
The Servicer (or an affiliate of the Servicer) may, at its option,
repurchase a Mortgage Loan or REO Property which becomes 120 or more days
Delinquent or for which the Servicer has accepted a deed in lieu of
foreclosure, during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
occurred with respect to such Mortgage Loan and ending on the last Business
Day of such calendar quarter. If the Servicer (or an affiliate of the
Servicer) does not exercise its purchase right with respect to a Mortgage Loan
during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency
Date" of a Mortgage Loan shall mean the date on which the Mortgage Loan first
became 120 days Delinquent. Prior to repurchase pursuant to this Section 3.16,
the Servicer shall be required to continue to make monthly advances pursuant
to Section 4.07. The Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests
of the Certificateholders. The Servicer shall purchase such (i) delinquent
Mortgage Loan at a price equal to the Principal Balance of the Mortgage Loan
plus accrued interest thereon at the Mortgage Interest Rate from the date to
which interest has last been paid to the Trust Fund to the date of purchase
plus any unreimbursed Servicing Advances and Advances or (ii) REO Property at
its fair market value as determined in good faith by the Servicer. Any such
repurchase of a Mortgage Loan or REO Property pursuant to this Section 3.16
shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan or REO
Property to the Servicer to the extent necessary, including the prompt
delivery of all documentation to the Servicer.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes), the Servicer shall deliver
to the Trustee (or the Custodian as the case may be) two executed copies of a
completed "Request for Release" in the form of Exhibit E. Upon receipt of such
Request for Release of Documents, the Trustee (or the Custodian as the case
may be) shall promptly release the related Mortgage File, in trust to (i) the
Servicer, or (ii) such other party identified in the related Request for
Release. Upon any such payment in full, or the receipt of such notification
that such funds have been placed in escrow, the Servicer shall direct the
Trustee in writing to execute an instrument of satisfaction (or assignment of
Mortgage without recourse) regarding the Mortgaged Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be
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chargeable to the Collection Account. In lieu of executing any such
satisfaction or assignment, as the case may be, the Servicer may prepare and
submit to the Trustee a satisfaction (or assignment without recourse, if
requested by the Person or Persons entitled thereto) in form for execution by
the Trustee with all requisite information completed by the Servicer; in such
event, the Trustee shall execute and acknowledge such satisfaction or
assignment, as the case may be, and deliver the same with the related Mortgage
File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy
relating to a Mortgage Loan, the Trustee shall (except in the case of the
payment or liquidation pursuant to which the related Mortgage File is released
to an escrow agent or an employee, agent or attorney of the Trustee), upon
written request of the Servicer and delivery to the Trustee (or the Custodian,
as the case may be) of two executed copies of a "Request for Release" in the
form of Exhibit E signed by a Servicing Officer, release the related Mortgage
File to the Servicer and shall execute such documents as shall be necessary to
the prosecution of any such proceedings, including, without limitation, an
assignment without recourse, representation or warranty of the related
Mortgage to the Servicer. Such receipt shall obligate the Servicer to return
the Mortgage File to the Trustee (or the Custodian, as the case may be) when
the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a Request for Release
evidencing such liquidation, the receipt shall be released by the Trustee (or
the Custodian, as the case may be) to the Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of
properties subject to Mortgages and (iv) second mortgage subordination
agreements. No application for approval shall be considered by the Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the Trustee
(which opinion shall not be an expense of the Trustee or the Trust Fund) that
such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Fund
as a REMIC or cause any REMIC constituting part of the Trust Fund to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions; (x) the provisions of the related Note and Mortgage have
been complied with; (y) the Combined Loan-to-Value Ratio and debt-to- income
ratio after any release does not exceed the maximum Combined Loan-to-Value
Ratio and debt-to-income ratio established in accordance with the underwriting
standards of the Mortgage Loans; and (z) the lien priority of the related
Mortgage is not affected. Upon receipt by the Trustee of a Servicing Officer's
certificate setting forth the action proposed to be taken in respect of a
particular Mortgage Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Trustee shall execute
and deliver to the Servicer the consent or partial release so requested by the
Servicer. A proposed form of consent or partial release, as the case may be,
shall accompany any Servicing Officer's certificate delivered by the Servicer
pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO
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Properties). The Servicer shall be entitled to retain additional servicing
compensation in the form of release fees, bad check charges, assumption fees,
modification or extension fees, late payment charges, customary real estate
referral fees or any other service-related fees, Insurance Proceeds and
Liquidation Proceeds not required to be deposited in the Collection Account
and similar items, to the extent collected from Mortgagors.
Section 3.19 Statement as to Compliance.
(a) The Servicer, at its own expense, will deliver to the Trustee
and the Depositor, not later than March 15th of each calendar year commencing
in 2005, a Servicing Officer's certificate stating, as to each signer thereof,
that (i) a review of the activities of the Servicer during such preceding
calendar year (or such shorter period in the case of the first such report)
and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
for such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and their receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Not later than March 15th of each calendar year commencing in
2005, the Servicer, at its expense, shall cause a nationally recognized firm
of independent certified public accountants to furnish to the Trustee and the
Depositor a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes
an assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in either the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America or the Audit Program for Mortgages serviced by Xxxxxxx
Mac, with respect to the servicing of residential mortgage loans during the
most recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the
American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. Immediately upon receipt of such
report, the Servicer shall furnish a copy of such report to the Trustee, the
Depositor and each Rating Agency. Copies of such statement shall be provided
by the Trustee to any Certificateholder upon request at the Servicer's
expense, provided that such statement is delivered by the Servicer to the
Trustee.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and its receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the
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Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Servicer shall provide to the Trustee, Certificateholders or
Certificate Owners that are federally insured savings and loan associations,
the Office of Thrift Supervision, the FDIC and the supervisory agents and
examiners of each of the foregoing (which, in the case of supervisory agents
and examiners, may be required by applicable state and federal regulations)
access to the documentation regarding the Mortgage Loans, such access being
afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Servicer designated by it.
Section 3.22 Commission Reporting.
(a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee
shall prepare and file (via the Securities and Exchange Commission's
Electronic Data Gathering and Retrieval System) on behalf of the Trust Fund
any Forms 8-K and 10-K (and the Servicer shall sign any 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. The
Depositor agrees to cooperate with the Trustee and Trustee's counsel to assist
the Trustee in determining the form and content of any filings that may be
required pursuant to this Section 3.22, and, without limiting the Trustee's
responsibility hereunder, otherwise to assist the Trustee in fulfilling its
duties under this Section 3.22.
(b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, with a copy of the statement to the Certificateholders
for such Distribution Date as an exhibit thereto. Prior to March 30th of each
year (or such earlier date as may be required by the Exchange Act and the
Rules and Regulations of the Securities and Exchange Commission), the Trustee
shall file a Form 10-K, in substance as required by applicable law or
applicable Security and Exchange Commission staff's interpretations. Such Form
10-K shall include as exhibits the Servicer's annual statement of compliance
described under Section 3.19 and the accountant's report described under
Section 3.20, in each case to the extent they have been timely delivered to
the Trustee. The Trustee shall have no liability with respect to (a) any
failure to properly prepare or file such periodic reports resulting from or
relating to the Trustee's inability or failure to obtain any information not
resulting from its own negligence, willful misconduct or bad faith or (b) any
inaccuracy in such periodic reports resulting from incorrect information
provided to the Trustee by the Servicer in a Remittance Report or otherwise.
The Form 10-K shall also include a certification in the form attached hereto
as Exhibit O-1 (the "Certification"), which shall be signed by the senior
officer of the Servicer in charge of servicing.
(c) In addition, the Trustee shall sign a certification (in the form
attached hereto as Exhibit O-2) for the benefit of the Servicer and its
officers, directors and Affiliates
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regarding certain aspects of the Certification (the "Trustee Certification")
(provided, however, that the Trustee shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K). Such
certification shall be delivered to the Servicer no later than the 20th day
prior to the latest date on which the Form 10-K is permitted to be filed,
without regard to extension (or if such day is not a Business Day, the
immediately preceding Business Day) and the Servicer shall deliver the
Certification to be filed to the Trustee no later than the 10th day prior to
the latest date on which the Form 10-K is permitted to be filed, without
regard to extension (or if such day is not a Business Day, the immediately
preceding Business Day).
In addition, (i) the Trustee shall, subject to the provisions of
Sections 8.01 and 8.02 hereof, indemnify and hold harmless the Depositor, the
Servicer and each of its officers, directors and Affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments and other costs and expenses arising
out of or based upon (a) a breach of the Trustee's obligations under this
Section 3.22(b), (b) the Trustee's negligence, bad faith or willful misconduct
in connection therewith or (c) any inaccuracy in the Trustee Certification and
(ii) the Servicer shall indemnify and hold harmless the Depositor, the Trustee
and their respective officers, directors and Affiliates from and against any
actual losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon (a) the failure of the Servicer to timely deliver
the Certification or (b) any material misstatement in the Certification. If
the indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then (i) the Trustee agrees that it shall contribute
to the amount paid or payable by the Depositor as a result of the losses,
claims, damages or liabilities of the Depositor in such proportion as is
appropriate to reflect the relative fault of the Depositor on the one hand and
the Trustee on the other in connection with a breach of the Trustee's
obligations under this Section 3.22(b) or the Trustee's negligence, bad faith
or willful misconduct in connection therewith and (ii) the Servicer agrees
that it shall contribute to the amount paid or payable by the Depositor as a
result of the losses, claims, damages or liabilities of the Depositor in such
proportion as is appropriate to reflect the relative fault of the Depositor on
the one hand and the Servicer on the other in connection with a breach of the
Servicer's obligations under this Section 3.22(b) or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor and the Servicer a copy of any
executed report, statement or information.
(e) Prior to January 30th of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust Fund.
(f) To the extent that, following the Closing Date, the Depositor
certifies that reports and certifications differing from those required under
this Section 3.22 comply with the reporting requirements under the Exchange
Act, the Trustee and the Servicer hereby agree that they will reasonably
cooperate to amend the provisions of this Section 3.22 in order to comply with
such amended reporting requirements and such amendment of this Section 3.22.
Any such amendment may result in the reduction of the reports filed by the
Depositor under the Exchange Act. Notwithstanding the foregoing, the parties
hereto shall not be obligated to enter into any
79
amendment pursuant to this Section 3.22 that adversely affects its obligations
and immunities under this Agreement.
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account an amount ("Compensating Interest") equal to the lesser
of (A) the aggregate of the Prepayment Interest Shortfalls on the Actuarial
Mortgage Loans for the related Distribution Date resulting from Principal
Prepayments in full on the Actuarial Mortgage Loans during the related
Prepayment Period and (B) 50% of its aggregate Servicing Fee received in the
related Collection Period. Compensating Interest shall be applied to offset
any Prepayment Interest Shortfalls on the Actuarial Mortgage Loans. The
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Compensating Interest. Such amounts so remitted
shall be included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Prepayment Interest Shortfalls on Simple Interest
Mortgage Loans or Relief Act Interest Shortfalls.
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances that were made
by the Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account (for purposes of this Section 3.25, an "Investment
Account"), to invest the funds in such Investment Account in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee is the
obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon. All such Permitted Investments shall be held
to maturity, unless payable on demand. Any investment of funds in an
Investment Account shall be made in the name of the Trustee or the Servicer,
as applicable (in its capacity as such) or in the name of a nominee of the
Trustee. The Trustee shall be entitled to sole possession (except with respect
to investment direction of funds held in the Collection Account) over each
such investment and the income thereon, and any certificate or other
instrument evidencing any such investment shall be delivered directly to the
Trustee or its agent, together with any
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document of transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee shall at the direction of the Servicer:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the
lesser of (1) all amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that such Permitted
Investment would not constitute a Permitted Investment in respect of
funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment,
or if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
The Trustee shall not in any way be held liable by reason of any
insufficiency in any Account held by the Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that
the Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Seller, the Depositor and each
Certificateholder harmless against any and all claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and
any other costs, fees and expenses that the Trustee, the Depositor and any
Certificateholder may sustain in any way related to the failure of the
Servicer to perform its duties and service the Mortgage Loans in compliance
with the Servicing Standards. The Servicer shall immediately notify the
Trustee, the Depositor and each Certificateholder if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Servicer shall assume (with the consent of the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against the Servicer, the Trustee, the Depositor and/or
Certificateholder in respect of
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such claim. The provisions of this Section 3.26 shall survive the termination
of this Agreement and the payment of the outstanding Certificates.
(b) None of the Depositor, the Seller, the Servicer, or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Depositor, the Seller or the Servicer or any such Person against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Servicer for a breach of the Servicing Standard, or against any
liability which would otherwise be imposed by reason of its respective willful
misfeasance, bad faith, fraud or negligence in the performance of its duties
or by reasons of negligent disregard of its respective obligations or duties
hereunder.
The Depositor, the Servicer, the Seller and any director, officer,
employee or agent of the Depositor, the Seller or the Servicer, may rely in
good faith on any document of any kind which, prima facie, is properly
executed and submitted by any appropriate Person with respect to any matters
arising hereunder. The Depositor, the Servicer, the Seller, and any director,
officer, employee or agent of the Depositor, the Seller or the Servicer shall
be indemnified and held harmless by the Trust Fund against any loss, liability
or expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
incurred in connection with any legal action incurred by reason of its
respective misfeasance, bad faith, fraud or negligence, a breach of a
representation or warranty hereunder or (in the case of the Servicer) a breach
of the Servicing Standard in the performance of its respective duties or by
reason of negligent disregard of its respective obligations or duties
hereunder. Neither the Depositor, the Seller nor the Servicer shall be under
any obligation to appear in, prosecute or defend any legal action unless such
action is related to its respective duties under this Agreement and in its
opinion does not expose it to any expense or liability; PROVIDED, HOWEVER,
that the Depositor, the Seller or the Servicer may in its discretion undertake
any action related to its obligations hereunder which it may deem necessary or
desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder.
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
On or before the last day of February of each year beginning in
2005, the Servicer shall file the reports of foreclosure and abandonment of
any Mortgaged Property required by Section 6050J of the Code with the Internal
Revenue Service and provide an Officer's Certificate certifying its compliance
with this Section 3.27 to the Trustee. The reports from the Servicer shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Section 6050J.
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Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell assets;
or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
Section 3.29 LIBOR Carryover Reserve Account.
No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "LIBOR
Carryover Reserve Account, U.S. Bank National Association, as Trustee, in
trust for the registered Holders of 2004-CB4 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 0000-XX0." Xx the Closing Date, the
Depositor will deposit, or cause to be deposited, into the LIBOR Carryover
Reserve Account $5,000.
On each Distribution Date as to which there is a LIBOR Carryover
Amount payable to the Class A-1 Certificates, the Trustee has been directed by
the Class X/N Certificateholders to, and therefore will, deposit into the
LIBOR Carryover Reserve Account the amounts described in Section
4.02(B)(xxviii), rather than distributing such amounts to the Class X/N
Certificateholders. On each such Distribution Date, the Trustee shall hold all
such amounts for the benefit of the Holders of the Class A-1 Certificates, and
will distribute such amounts to the Holders of the Class A-1 Certificates in
the amounts and priorities set forth in Section 4.02(B). If no LIBOR Carryover
Amounts are payable on a Distribution Date, the Trustee shall deposit into the
LIBOR Carryover Reserve Account on behalf of the Class X/N Certificateholders,
from amounts otherwise distributable to the Class X/N Certificateholders, an
amount such that when added to other amounts already on deposit in the LIBOR
Carryover Reserve Account, the aggregate amount on deposit therein is equal to
$5,000.
For federal and state income tax purposes, the Class X/N
Certificateholders will be deemed to be the owners of the LIBOR Carryover
Reserve Account and all amounts deposited into the LIBOR Carryover Reserve
Account shall be treated as amounts distributed by REMIC 6 to the Holders of
the Class X/N Certificates. Upon the termination of the Trust, or the payment
in full of the Class A-1 Certificates, all amounts remaining on deposit in the
LIBOR Carryover Reserve Account will be released by the Trust and distributed
to the Class X/N Certificateholders or their designees. The LIBOR Carryover
Reserve Account will be part of the Trust but not part of any REMIC and any
payments to the Holders of the Class A-1 Certificates of LIBOR Carryover
Amounts will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860(G)(a)(1).
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By accepting a Class X/N Certificate, each Class X/N
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby
is directed, to deposit into the LIBOR Carryover Reserve Account the amounts
described above on each Distribution Date as to which there is any LIBOR
Carryover Amount rather than distributing such amounts to the Class X/N
Certificateholders. By accepting a Class X/N Certificate, each Class X/N
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged
by such acceptance.
Amounts on deposit in the LIBOR Carryover Reserve Account shall
remain uninvested.
For federal tax return and information reporting, the value of the
right of the Class A-1 Certificateholders to receive payments from the LIBOR
Carryover Reserve Account in respect of any LIBOR Carryover Amount may be
obtained from the Trustee upon request.
Section 3.30 Advance Facility.
(a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the
documentation for which complies with Section 3.30(e) below, under which (1)
the Servicer assigns or pledges its rights under this Agreement to be
reimbursed for any or all Advances and/or Servicing Advances to (i) a Person,
which may be a special-purpose bankruptcy-remote entity (an "SPV"), (ii) a
Person, which may simultaneously assign or pledge such rights to an SPV or
(iii) a lender (a "Lender"), which, in the case of any Person or SPV of the
type described in either of the preceding clauses (i) or (ii), may directly or
through other assignees and/or pledgees, assign or pledge such rights to a
Person, which may include a trustee acting on behalf of holders of debt
instruments (any such Person or any such Lender, an "Advance Financing
Person"), and/or (2) an Advance Financing Person agrees to fund all the
Advances and/or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. No consent of the Trustee, Certificateholders or
any other party shall be required before the Servicer may enter into an
Advance Facility nor shall the Trustee or the Certificateholders be a third
party beneficiary of any obligation of an Advance Financing Person to the
Servicer. Notwithstanding the existence of any Advance Facility under which an
Advance Financing Person agrees to fund Advances and/or Servicing Advances,
(A) the Servicer (i) shall remain obligated pursuant to this Agreement to make
Advances and/or Servicing Advances pursuant to and as required by this
Agreement and (ii) shall not be relieved of such obligations by virtue of such
Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee at the
address set forth in Section 11.05 hereof a written notice (an "Advance
Facility Notice"), stating (a) the identity of the Advance Financing Person
and (b) the identity of the Person (the "Servicer's Assignee") that will,
subject to Section 3.30(c) hereof, have the right to make withdrawals from the
Collection Account pursuant to Section 3.05 hereof to reimburse previously
unreimbursed Advances and/or
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Servicing Advances ("Advance Reimbursement Amounts"). Advance Reimbursement
Amounts (i) shall consist solely of amounts in respect of Advances and/or
Servicing Advances for which the Servicer would be permitted to reimburse
itself in accordance with Section 3.05 hereof, assuming the Servicer had made
the related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist
of amounts payable to a successor Servicer in accordance with Section 3.05
hereof to the extent permitted under Section 3.30(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of Advances and/or Servicing Advances in accordance
with Section 3.05 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Trustee in the manner set
forth in Section 11.05 hereof. Upon receipt of such written notice, the
Servicer shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Collection Account all Advance Reimbursement
Amounts. Notwithstanding the foregoing, and for the avoidance of doubt, (i)
the Servicer and/or the Servicer's Assignee shall only be entitled to
reimbursement of Advance Reimbursement Amounts hereunder pursuant to Section
3.05 of this Agreement and shall not otherwise be entitled to make withdrawals
of, or receive, Advance Reimbursement Amounts that shall be deposited in the
Distribution Account pursuant to Section 3.04(b) hereof, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer
or Servicer's Assignee, as applicable, shall be entitled pursuant to Section
3.05 hereof. An Advance Facility may be terminated by the joint written
direction of the Servicer and the related Advance Financing Person. Written
notice of such termination shall be delivered to the Trustee in the manner set
forth in Section 11.05 hereof. The Trustee shall have no duty or liability
with respect to the calculation of any Advance Reimbursement Amount and shall
be entitled to rely without independent investigation on the Advance Facility
Notice and on such Servicer's report of the amount of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts that were included in the
remittance from such Servicer to the Trustee pursuant to Section 4.07. Such
Servicer shall maintain and provide to any successor Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
(d) [Reserved].
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which a Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's
Assignee shall have received some or all of an Advance Reimbursement Amount
related to Advances and/or Servicing Advances that were made by a Person other
than such predecessor Servicer or its related Advance Financing Person in
error, then such Servicer's Assignee shall be required to remit any portion of
such Advance Reimbursement Amount to each Person entitled to such portion of
such Advance Reimbursement Amount. Without limiting the generality of the
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foregoing, the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances and/or Servicing Advances funded by the
Servicer to the extent the related Advance Reimbursement Amounts have not been
assigned or pledged to such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.07(d), any Nonrecoverable Advance referred
to therein may have been made by the Servicer or any predecessor Servicer. In
making its determination that any Advance or Servicing Advance theretofore
made has become a Nonrecoverable Advance, the Servicer shall apply the same
criteria in making such determination regardless of whether such Advance or
Servicing Advance shall have been made by the Servicer or any predecessor
Servicer.
(g) The Trustee shall not, as a result of the existence of any
Advance Facility, have any additional responsibility to track or monitor
Advance Reimbursement Amounts or any Advance Facility, and, except as
expressly provided in Section 3.30(c) above, is not and shall not be obligated
to make any payment with respect to any Advance Reimbursement Amount. The
Servicer hereby indemnifies the Trustee, the Trust Fund and any successor
Servicer, as applicable, from and against any claims, losses, liabilities or
damages resulting from any claim by the related Advancing Person, except to
the extent that such claim, loss, liability or damage resulted from or arose
out of negligence, recklessness or willful misconduct on the part of the
Trustee or the successor Servicer, or failure by the successor Servicer or the
Trustee to remit funds as required by this Agreement or the commission of an
act or omission to act by the successor Servicer or the Trustee, and the
passage of any applicable cure or grace period, such that a Servicer Event of
Termination under this Agreement occurs or such entity is subject to
termination for cause under this Agreement.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee 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 Trustee may conclusively rely):
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) concurrently, to the Holders of the Class A Certificates, on a
pro rata basis based on the entitlement of each such Class, the
applicable Accrued Certificate Interest for such Distribution Date;
(iii) concurrently, to the Holders of the Class A Certificates, on a
pro rata basis based on the entitlement of each such Class, the
applicable Interest Carry Forward Amount for the Class A Certificates;
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(iv) to the Holders of the Class M-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(v) to the Holders of the Class M-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(vi) to the Holders of the Class M-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(vii) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(viii) to the Holders of the Class B-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(ix) to the Holders of the Class B-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(x) to the Holders of the Class B-4 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date; and
(xi) 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.
With respect to any distributions to be made on the Class B-2
Certificates, the Class B-3 Certificates or the Class B-4 Certificates
pursuant to this Section 4.01, such distributions will be made first, on the
Class B-2 Interest, the Class B-3 Interest or the Class B-4 Interest, as
applicable, and then, on the related Class of Certificates.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(A) Distributions of Principal:
I. On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, distributions in respect of principal
to the extent of the Principal Remittance Amount for such Distribution Date
will be made in the following amounts and order of priority:
(i) to the Holders of the Class A Certificates (allocated among the
Class A Certificates in the priority described below), until the
Certificate Principal Balances thereof have been reduced to zero;
(ii) to the Holders of the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(iii) to the Holders of the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
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(iv) to the Holders of the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(v) to the Holders of the Class B-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(vi) to the Holders of the Class B-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(vii) to the Holders of the Class B-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
(viii) to the Holders of the Class B-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
II. On each Distribution Date (a) on or after the Stepdown Date and
(b) on which a Trigger Event is not in effect, distributions in respect of
principal to the extent of the Principal Remittance Amount for such
Distribution Date will be made in the following amounts and order of priority:
(i) to the Holders of the Class A Certificates (allocated among the
Class A Certificates in the priority described below), until the Senior
Principal Distribution Amount has been distributed in full;
(ii) to the Holders of the Class M-1 Certificates, the Class M-1
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) to the Holders of the Class M-2 Certificates, the Class M-2
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(iv) to the Holders of the Class M-3 Certificates, the Class M-3
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(v) to the Holders of the Class B-1 Certificates, the Class B-1
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(vi) to the Holders of the Class B-2 Certificates, the Class B-2
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;
(vii) to the Holders of the Class B-3 Certificates, the Class B-3
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero; and
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(viii) to the Holders of the Class B-4 Certificates, the Class B-4
Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero.
With respect to the Class A Certificates, all principal
distributions will be distributed sequentially,
first, to the Holders of the Class A-6 Certificates, in an amount
equal to the Class A-6 Lockout Distribution Amount for the related
Distribution Date,
second, to the Holders of the Class A-1 Certificates, until the
Certificate Principal Balance of the Class A-1 Certificates has been
reduced to zero,
third, to the Holders of the Class A-2 Certificates, until the
Certificate Principal Balance of the Class A-2 Certificates has been
reduced to zero,
fourth, to the Holders of the Class A-3 Certificates, until the
Certificate Principal Balance of the Class A-3 Certificates has been
reduced to zero,
fifth, to the Holders of the Class A-4 Certificates, until the
Certificate Principal Balance of the Class A-4 Certificates has been
reduced to zero,
sixth, to the Holders of the Class A-5 Certificates, until the
Certificate Principal Balance of the Class A-5 Certificates has been
reduced to zero, and
seventh, to the Holders of the Class A-6 Certificates, until the
Certificate Principal Balance of the Class A-6 Certificates has been
reduced to zero;
PROVIDED, HOWEVER, on any Distribution Date on which the aggregate
Certificate Principal Balance of the Mezzanine Certificates has been reduced
to zero, notwithstanding anything contained herein to the contrary, all
distributions of principal to the Class A Certificates will be distributed
concurrently, on a PRO RATA basis based on the Certificate Principal Balance
of each such Class.
(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 fund any Accrued Certificate Interest on the Class A
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01,
such amount to be distributed on a PRO RATA basis based on the
entitlement of each such Class;
(ii) to fund any Interest Carry Forward Amounts on the Class A
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01,
such amount to be distributed on a PRO RATA basis based on the
entitlement of each such Class;
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(iii) to fund any Accrued Certificate Interest on the Class M-1
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(iv) to fund the Interest Carry Forward Amount for the Class M-1
Certificates, if any, for such Distribution Date;
(v) to fund the Class M-1 Realized Loss Amortization Amount, if any,
for such Distribution Date;
(vi) to fund any Accrued Certificate Interest on the Class M-2
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(vii) to fund the Interest Carry Forward Amount for the Class M-2
Certificates, if any, for such Distribution Date;
(viii) to fund the Class M-2 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(ix) to fund any Accrued Certificate Interest on the Class M-3
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(x) to fund the Interest Carry Forward Amount for the Class M-3
Certificates, if any, for such Distribution Date;
(xi) to fund the Class M-3 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(xii) to fund any Accrued Certificate Interest on the Class B-1
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(xiii) to fund the Interest Carry Forward Amount for the Class B-1
Certificates, if any, for such Distribution Date;
(xiv) to fund the Class B-1 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(xv) to fund any Accrued Certificate Interest on the Class B-2
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(xvi) to fund the Interest Carry Forward Amount for the Class B-2
Certificates, if any, for such Distribution Date;
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(xvii) to fund the Class B-2 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(xviii) to fund any Accrued Certificate Interest on the Class B-3
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(xix) to fund the Interest Carry Forward Amount for the Class B-3
Certificates, if any, for such Distribution Date;
(xx) to fund the Class B-3 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(xxi) to fund any Accrued Certificate Interest on the Class B-4
Certificates that remains unpaid after distribution of the Interest
Remittance Amount for such Distribution Date pursuant to Section 4.01;
(xxii) to fund the Interest Carry Forward Amount for the Class B-4
Certificates, if any, for such Distribution Date;
(xxiii) to fund the Class B-4 Realized Loss Amortization Amount, if
any, for such Distribution Date;
(xxiv) to the LIBOR Carryover Reserve Account for distribution to
the Class A-1 Certificates, the aggregate amount of any LIBOR Carryover
Amount;
(xxv) from amounts distributed on the Class X/N Certificates, to the
Class N Certificates, (A) the Accrued Certificate Interest for the Class
N Certificates, (B) the unpaid Interest Carry Forward Amount for the
Class N Certificates and (C) any remaining Monthly Excess Cashflow Amount
to reduce the Class N Notional Amount, until the Class N Notional Amount
has been reduced to zero;
(xxvi) from amounts distributed on the Class X/N Certificates, to
the Class X Certificates, the Class X Distributable Amount for such
Distribution Date; and
(xxvii) any remaining amounts to the Holders of the Residual
Certificates (in respect of the Class R-1 Interest, the Class R-2
Interest, the Class R-3 Interest, the Class R-4 Interest, the Class R-5
Interest and the Class R-6 Interest, as applicable).
Following the foregoing distributions, an amount equal to the amount
of Subsequent Recoveries deposited into the Collection Account pursuant to
Section 3.04(a) shall be applied to increase the Certificate Principal Balance
of the Class of Certificates with the Highest Priority up to the extent of
such Realized Losses previously allocated to that Class of Certificates
pursuant to Section 4.03. An amount equal to the amount of any remaining
Subsequent Recoveries shall be applied to increase the Certificate Principal
Balance of the Class of Certificates with the next Highest Priority, up to the
amount of such Realized Losses previously allocated to that Class of
Certificates pursuant to Section 4.03. Holders of such Certificates will not
be entitled to any distribution in respect of interest on the amount of such
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increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.
With respect to any distributions to be made on the Class B-2
Certificates, the Class B-3 Certificates, the Class B-4 Certificates, the
Class N Certificates or the Class X Certificates pursuant to this Section
4.02, such distributions will be made first, on the Class B-2 Interest, the
Class B-3 Interest, the Class B-4 Interest or the Class X/N Interest, as
applicable, and then, on the related Class of Certificates.
(c) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.01) shall be allocated to the Class N
Certificates in the priority set forth under Section 4.02(B)(xxv) for so long
as the Notional Amount of the Class N Certificates is greater than zero, and
to the Class X Certificates after the Class N Notional Amount has been reduced
to zero.
(d) On each Distribution Date, after making the distributions of the
Available Funds as set forth above, the Trustee will withdraw from the LIBOR
Carryover Reserve Account, to the extent of amounts remaining on deposit
therein, the amount of any LIBOR Carryover Amount for such Distribution Date
and distribute such amount to the Class A-1 Certificates.
Section 4.03 Allocation of Losses.
(a) All Realized Losses on the Mortgage Loans allocated to any
Regular Certificate shall be allocated by the Trustee on each Distribution
Date as follows: first, to the Accrued Certificate Interest on the Class X/N
Interest as provided in Section 1.03 (after the allocation thereto of any
Prepayment Interest Shortfalls or Relief Act Interest Shortfalls as provided
in Section 1.03); second, to the Overcollateralization Amount, until the
Overcollateralization Amount has been reduced to zero; third, to the Class B-4
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; fourth, to the Class B-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class B-2
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; sixth, to the Class B-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; seventh, to the Class M-3
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; eighth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero and ninth, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after
the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the relevant Distribution Date, before reduction thereof
by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.
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Any allocation of Realized Losses to a Class A Certificate and a
Mezzanine Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated.
(b) Special Hazard Losses will be allocated as described above,
except that if the aggregate amount of such losses, as of any date of
determination, exceeds the greatest of (i) 1.0% of the Principal Balance of
the Mortgage Loans as of the Cut-off Date, (ii) two times the amount of the
Principal Balance of the largest Mortgage Loan as of the date of determination
and (iii) an amount equal to the current Principal Balances of the Mortgage
Loans in the largest zip-code concentration in the State of California as of
the date of determination, such excess losses will be allocated among all the
outstanding Classes of Certificates, including the Class B-2 Interest, the
Class B-3 Interest, the Class B-4 Interest and the Class X/N Interest, PRO
RATA, based on their respective Certificate Principal Balances or Notional
Amount, as applicable.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribution
Date to each Certificateholder of record on the related Record Date (other
than as provided in Section 10.01 respecting the final distribution), in the
case of Certificateholders of the Certificates, by wire transfer in
immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five
Business Days prior to the Record Date immediately prior to such Distribution
Date and is the registered owner of such Certificates the aggregate initial
Certificate Principal Balance or Notional Amount of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Trustee may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Distributions among
Certificateholders shall be made in proportion to the Percentage Interests
evidenced by the Certificates held by such Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book Entry Certificate
are to be made by the Depository and the Depository Participants in accordance
with the provisions of the Certificates. None of the Trustee, the Depositor,
the Servicer or the Seller shall have any responsibility therefor except as
otherwise provided by applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based, as applicable, on the Mortgage
Loan information contained in the Remittance Report, the Trustee shall (i)
prepare and forward by mail to each Holder of the Regular Certificates and
(ii) make available on its website at
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xxx.xxxxxx.xxx/xxx for access by each Holder of the Regular Certificates, a
statement as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to principal or
reduction of Notional Amount, separately identified;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class X Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the
Overcollateralization Target Amount as of such Distribution Date and the
Monthly Excess Interest Amount and Monthly Excess Cashflow Amount for
such Distribution Date;
(iv) [reserved];
(v) the aggregate amount of Advances for the related Collection
Period;
(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) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number of such Mortgage
Loan, the unpaid principal balance and the Principal Balance of such
Mortgage Loan as of the date it became an REO Property;
(x) the book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the Distribution
Date, and, cumulatively, the total number and cumulative principal
balance of all REO Properties 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 Prepayment Charges collected
(including amounts deposited in connection with the full or partial
waiver of such Prepayment
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Charges pursuant to Section 3.01) during the related Collection Period
and the amounts thereof allocable to the Class N Certificates and the
Class X Certificates;
(xiii) the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses;
(xiv) the Certificate Principal Balance or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses or Applied Realized
Loss Amounts, as applicable, made on such Distribution Date, separately
identifying any reduction thereof due to allocations of Realized Losses
or Applied Realized Loss Amounts;
(xv) the Accrued Certificate Interest in respect of each Class of
Offered Certificates, the Class B-3 Certificates and the Class B-4
Certificates for such Distribution Date, and the respective portions
thereof, if any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date and the amount of
any LIBOR Carryover Amounts;
(xvi) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.23;
(xvii) the amount of the Trustee Fee paid;
(xviii) the LIBOR Carryover Amounts distributed on such Distribution
Date and the amounts remaining after giving effect to distributions
thereof on such Distribution Date;
(xix) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xx) whether a Trigger Event has occurred and is continuing, and the
cumulative Realized Losses, as a percentage of the original Pool Balance;
(xxi) the Available Funds;
(xxii) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxiii) the Liquidation Report for such Distribution Date;
(xxiv) the aggregate Principal Balance of Mortgage Loans purchased
by the Servicer or Seller during the related Collection Period and
indicating the Section of this Agreement requiring or allowing the
purchase of each such Mortgage Loan; and
(xxv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Servicer (or an affiliate) during the related
Collection Period in connection with Section 3.16.
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The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.
In the case of information furnished pursuant to subclauses (i)
through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Certificateholder of a Regular Certificate, if
requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set
forth in subclauses (i), (ii), (xv) and (xviii) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to the
Residual Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to
Residual Certificateholders by the Trustee pursuant to any requirements of the
Code as from time to time in force.
Section 4.07 Remittance Reports; Advances.
(a) On the second Business Day following each Determination Date but
in no event less than four Business Days prior to the related Distribution
Date, the Servicer shall deliver to the Trustee by telecopy (or by such other
means as the Servicer and the Trustee may agree from time to time) a
Remittance Report with respect to the related Distribution Date. On the same
date, the Servicer shall forward to the Trustee by overnight mail a computer
readable magnetic tape or diskette or in such other medium as may be agreed
between the Servicer and the Trustee containing the information set forth in
such Remittance Report with respect to the related Distribution Date. Not
later than the close of business New York time on the Servicer Remittance
Date, the Servicer shall deliver or cause to be delivered to the Trustee in
addition to the information provided on the Remittance Report, such other
information reasonably available to it with respect to the Mortgage Loans as
the Trustee may reasonably request or order in order for the Trustee to
perform the calculations necessary to make the distributions contemplated by
Section 4.01, 4.02 and 4.03 and to prepare the statements to
Certificateholders contemplated by Section 4.06. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), (i) the aggregate
amount of Monthly Payments (net of the related Servicing Fee and other than
the portion of the Monthly Payment representing principal on any second lien
Mortgage Loan), due during the related Collection Period in respect
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of the Actuarial Mortgage Loans, which Monthly Payments were delinquent on a
contractual basis as of the close of business on the related Determination
Date and (ii) with respect to each REO Property, which REO Property was
acquired during or prior to the related Prepayment Period and as to which such
REO Property an REO Disposition did not occur during the related Prepayment
Period, an amount equal to the excess, if any, of only the interest portion of
the Monthly Payments (net of the related Servicing Fee) that would have been
due on the related Due Date in respect of the related Mortgage Loans, over the
net income from such REO Property deposited in the Collection Account pursuant
to Section 3.13 for distribution on such Distribution Date. For purposes of
the preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with
a delinquent Balloon Payment is equal to the assumed monthly payment that
would have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan. The Servicer shall
not be obligated to make any Advance with respect to Simple Interest Mortgage
Loans.
On or before the close of business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to
the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that amounts held
for future distribution have been, as permitted by this Section 4.07, used by
the Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be
made by the Servicer with respect to the Mortgage Loans and REO Properties. In
addition, the Servicer shall have the right to reimburse itself for any
Advances previously made from the Collection Account, to the extent of funds
held therein for future distribution. Any amounts held for future distribution
and so used shall be appropriately reflected in the Servicer's records and
replaced by the Servicer by deposit in the Collection Account on or before any
future Servicer Remittance Date to the extent that the Available Funds for the
related Distribution Date (determined without regard to Advances to be made on
the Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01
and 4.02 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. The Trustee will provide
notice to the Servicer by telecopy by the close of business on any Servicer
Remittance Date in the event that the amount remitted by the Servicer to the
Trustee on such date is less than the Advances required to be made by the
Servicer for the related Distribution Date, as set forth in the related
Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until the earlier of such time as such Mortgage Loan is paid in full
by the Mortgagor or disposed of by the Trust, or until the recovery of all
Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if
such Advance would, if made, constitute a Nonrecoverable Advance. The
determination by the Servicer that it has made a Nonrecoverable Advance or
that any proposed Advance, if made, would constitute a
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Nonrecoverable Advance, shall be evidenced by an Officers' Certificate of the
Servicer delivered to the Depositor and the Trustee.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class A Certificates, the Mezzanine Certificates, the
Class N Certificates, the Class X Certificates and the Residual Certificates
shall be substantially in the forms annexed hereto as exhibits, and shall, on
original issue, be executed by the Trustee and authenticated and delivered by
the Certificate Registrar to or upon the receipt of a Written Order to
Authenticate from the Depositor concurrently with the sale and assignment to
the Trustee of the Trust Fund. Each Class of the Class A Certificates and the
Mezzanine Certificates shall be initially evidenced by one or more
Certificates representing a Percentage Interest with a minimum dollar (or
notional amount) denomination of $25,000 and integral multiples of $1 in
excess thereof. The Class N, Class X and Residual Certificates are issuable
only in minimum Percentage Interests of 10%.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall bind the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose, unless such
Certificate shall have been manually authenticated by the Certificate
Registrar substantially in the form provided for herein, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Subject to Section 5.02(c), the Class A Certificates and the Mezzanine
Certificates shall be Book-Entry Certificates. The Class N, Class X and
Residual Certificates shall not be Book-Entry Certificates but shall be issued
in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially
serve as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the
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Certificate Registrar to the same extent as they apply to the Trustee. Any
Certificate Registrar appointed in accordance with this Section 5.02(a) may at
any time resign by giving at least 30 days' advance written notice of
resignation to the Trustee, the Servicer and the Depositor, such resignation
to become effective upon appointment of a successor Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Residual
Certificate, upon satisfaction of the conditions set forth below, the Trustee
on behalf of the Trust shall execute and the Certificate Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
the Certificate Registrar shall authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the 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
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall for all purposes deal with
the Depository as representative of the Certificate Owners of the Certificates
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of such representative shall not be
deemed to be inconsistent if they are made with respect to different
Certificate Owners; (vi) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and
(vii) the direct participants of the Depository shall have no rights under
this Agreement under or with respect to any of the Certificates held on their
behalf by the Depository, and the Depository may be treated by the Trustee and
its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
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All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor or (ii) after the occurrence of a
Servicer Event of Termination, the Certificate Owners of each Class of
Book-Entry Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advises the Trustee and Depository through the
Financial Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate
Owners. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall, at the Depositor's
expense, in the case of (ii) above, or the Seller's expense, in the case of
(i) and (iii) above, execute on behalf of the Trust and the Certificate
Registrar shall authenticate the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee, the Certificate Registrar, the Servicer, any Paying Agent and the
Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Private
Certificates by the Depositor, no transfer, sale, pledge or other disposition
of any Private Certificate shall be made unless such disposition is exempt
from the registration requirements of the Securities Act of 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-2) 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-1) 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
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may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of an ERISA Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor, (such requirement
is satisfied only by the Certificate Registrar's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit
plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, nor a person acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect
such transfer or (ii) (except in the case of a Residual, Class X or Class N
Certificate) if the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term
is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60") and that the purchase and holding of such Certificates are
covered under Sections I and III of PTCE 95-60 or (iii) (except in the case of
a Residual 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 and holding of
such ERISA Restricted Certificate will not result in a non-exempt prohibited
transaction under ERISA and the Code and will not subject the Servicer, the
Trustee or the Certificate Registrar to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of
the preceding sentence, the representation in (i) or (ii) 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 in violation of this paragraph as
described above shall be void and of no effect.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and
to have irrevocably appointed the Depositor or its designee as its
attorney-in-fact to negotiate the terms of any mandatory sale under clause (v)
below and to execute all instruments of transfer and to do all other things
necessary in connection with any such sale, and the rights of each Person
acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
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(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Residual Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the
proposed transferee to the effect that, among other things, such
transferee is a Permitted Transferee and that it is not acquiring
its Ownership Interest in the Residual Certificate that is the
subject of the proposed transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become a Holder of a Residual
Certificate, then the prior Holder of such Residual Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Residual Certificate. The
Certificate Registrar shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Residual Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so
long as the Certificate Registrar received the documents specified in
clause (iii). The Trustee shall be entitled to recover from any Holder of
a Residual Certificate that was in fact not a Permitted Transferee at the
time such distributions were made all distributions made on such Residual
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of such
Residual Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event that
the Trustee determines that the Holder of such Residual Certificate may
be liable for any amount due under this Section
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or any other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim. The
terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee will provide to the
Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Trustee shall be entitled to
reasonable compensation for providing such information from the person to
whom it is provided.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Certificate Registrar, in form and substance satisfactory to
the Certificate Registrar, (i) written notification from each Rating Agency
that the removal of the restrictions on Transfer set forth in this Section
will not cause such Rating Agency to downgrade its rating of the Certificates
and (ii) an Opinion of Counsel to the effect that such removal will not cause
any REMIC hereunder to fail to qualify as a REMIC.
(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.
The beneficial ownership of the Class N Certificates and the Class X
Certificates shall not be transferred to a person other than a United States
Person (a "non-U.S. Person") unless such beneficial ownership is transferred
to a non-United States Person who will at all times be a Proportionate Holder.
Neither the Class N nor the Class X Certificates shall be pledged or used as
collateral for any other obligation if it would cause any portion of the Trust
Fund to be treated as a taxable mortgage pool under section 7707(i) of the
Code. These restrictions on transfers of Class X and Class N Certificates set
forth in this Section 5.02 shall cease to apply (and the applicable portions
of any legend on a Class X or Class N Certificate may be deleted) with respect
to transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller or
the Servicer to the effect that the elimination of such restrictions will not
cause the Trust Fund to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax or tax
reporting obligation on the Trust Fund, a Certificateholder or another Person.
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
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Certificate and (ii) there is delivered to the Trustee, the Depositor and the
Certificate Registrar such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Trustee or
the Certificate Registrar that such Certificate has been acquired by a bona
fide purchaser, the Trustee shall execute on behalf of the Trust, and the
Certificate Registrar shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee or the Certificate Registrar
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Certificate
Registrar) in connection therewith. Any duplicate Certificate issued pursuant
to this Section, shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate Registrar,
any Paying Agent and any agent of the Servicer, the Depositor, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section
4.01 and Section 4.02 and for all other purposes whatsoever, and none of the
Servicer, the Trust, the Trustee nor any agent of any of them shall be
affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and Section 4.02 and shall
report the amounts of such distributions to the Trustee. The duties of the
Paying Agent may include the obligation (i) to withdraw funds from the
Collection Account pursuant to Section 3.05 and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trustee. The Trustee may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor and the Rating Agencies. The Trustee as Paying Agent shall be
subject to the same standards of care, limitations on liability and rights to
indemnity as the Trustee, and the provisions of Sections 8.01, 8.02, 8.03,
8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the Paying Agent to the same
extent as they apply to the Trustee. Any Paying Agent appointed in accordance
with this Section 5.02(a) may at any time resign by giving at least 30 days'
advance written notice of resignation to the Trustee, the Servicer and the
Depositor, such resignation to become effective upon appointment of a
successor Paying Agent.
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ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Seller, the Servicer and the
Depositor.
The Seller and the Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Seller or Servicer, as the case may be, herein. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the
Depositor.
Any entity into which the Seller, the Servicer or the Depositor may
be merged or consolidated, or any entity resulting from any merger, conversion
or consolidation to which the Seller, the Servicer or the Depositor shall be a
party, or any corporation succeeding to the business of the Seller, the
Servicer or the Depositor, shall be the successor of the Seller, the Servicer
or the Depositor, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; PROVIDED, HOWEVER,
that the successor Servicer shall satisfy all the requirements of Section 7.02
with respect to the qualifications of a successor Servicer.
Section 6.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer, the Depositor nor any of the directors or
officers or employees or agents of the Servicer or the Depositor shall be
under any liability to the Trust or the Certificateholders for any action
taken or for refraining from the taking of any action by the Servicer in good
faith pursuant to this Agreement, or for errors in judgment; PROVIDED,
HOWEVER, that this provision shall not protect the Servicer, the Depositor or
any such Person against any liability which would otherwise be imposed by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of duties of the Servicer or the Depositor or by reason of its
reckless disregard of its obligations and duties of the Servicer or the
Depositor hereunder; PROVIDED, FURTHER, that this provision shall not be
construed to entitle the Servicer to indemnity in the event that amounts
advanced by the Servicer to retire any senior lien exceed Liquidation Proceeds
(in excess of related liquidation expenses) realized with respect to the
related Mortgage Loan. The Servicer, the Depositor and any director or officer
or employee or agent of the Servicer or the Depositor may rely in good faith
on any document of any kind PRIMA FACIE properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer, the Depositor
and any director or officer or employee or agent of the Servicer or the
Depositor shall be indemnified by the Trust and held harmless against any
loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense incurred by reason of its willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Servicer or the Depositor
may undertake any such action which it may deem necessary or desirable in
respect of this Agreement, and the rights and duties of the parties hereto and
the interests of the
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Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer or the Depositor shall be
entitled to pay such expenses from the proceeds of the Trust or to be
reimbursed therefor pursuant to Section 3.05 upon presentation to the Trustee
of documentation of such expenses, costs and liabilities. The Servicer's right
to indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01
with respect to any losses, expenses, costs or liabilities arising prior to
such resignation or termination (or arising from events that occurred prior to
such resignation or termination). This paragraph shall apply to the Servicer
and the Depositor solely in their capacities as Servicer and Depositor
hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it or its subsidiaries or Affiliates, the other activities of
the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Trustee in writing and such
proposed successor servicer is reasonably acceptable to the Trustee; and (b)
each Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor servicer stating that the proposed appointment of
such successor servicer as Servicer hereunder will not result in the reduction
or withdrawal of the then current rating of the Regular Certificates or the
ratings that are in effect; PROVIDED, HOWEVER, that no such resignation by the
Servicer shall become effective until such successor servicer or, in the case
of (i) above, the Trustee shall have assumed the Servicer's responsibilities
and obligations hereunder or the Trustee shall have designated a successor
servicer in accordance with Section 7.02. Any such resignation shall not
relieve the Servicer of responsibility for any of the obligations specified in
Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer. Any such determination permitting the resignation
of the Servicer pursuant to clause (i) above shall be evidenced by an Opinion
of Counsel to such effect delivered to the Trustee. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee.
The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all the Servicer's right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee, for
the benefit of certain lenders, and (ii) provided that no Servicer Event of
Termination exists, agree that upon delivery to the Trustee by the Servicing
Rights Pledgee of a letter signed by the Servicer whereunder the Servicer
shall resign as Servicer under this Agreement, the Trustee shall appoint the
Servicing Rights Pledgee or its designee as successor Servicer, provided that
at the time of such appointment, the Servicing Rights Pledgee or such designee
meets the requirements of a successor Servicer pursuant to Section 7.02(a) and
agrees to be subject to the terms of this Agreement. If, pursuant to any
provision hereof, the duties of the Servicer are transferred to a successor,
the entire amount of the
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Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor.
Section 6.05 Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not
relieve the Servicer of its liabilities and responsibilities with respect to
such duties and shall not constitute a resignation within the meaning of
Section 6.04. The Servicer shall provide the Trustee and the Rating Agencies
with 60 days prior written notice prior to the delegation of any of its duties
to any Person other than any of the Servicer's Affiliates or their respective
successors and assigns.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or (B) any
other failure by the Servicer to deposit in the Collection Account or
Distribution Account any deposit required to be made under the terms of
this Agreement which continues unremedied for a period of one Business
Day after the date upon which written notice of such failure shall have
been given to the Servicer by the Trustee or by any Holder of a Regular
Certificate evidencing at least 25% of the Voting Rights; or
(ii) The failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or
the failure by the Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer
as set forth in this Agreement, which failure continues unremedied for a
period of 30 days, after the date (A) on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or by any Holder of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a court
or agency or supervisory authority having jurisdiction in the premises
for the appointment of a trustee, conservator, receiver or liquidator in
any insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent to
the appointment of a conservator or receiver or liquidator or similar
person in any
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insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Servicer or of or relating
to all or substantially all of its property; or a decree or order of a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver, liquidator or
similar person in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged,
unbonded or unstayed for a period of 60 days; or the Servicer shall admit
in writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(v) The aggregate amount of cumulative Realized Losses incurred
since the Cut- off Date through the last day of the related Collection
Period divided by the initial Pool Balance exceeds the applicable
percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
------------------------------------------------------------------- ----------------
July 2007 through June 2008....................................... 5.00%
July 2008 through June 2009....................................... 5.50%
July 2009 through June 2010....................................... 7.00%
July 2010 and thereafter.......................................... 8.00%
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following
the Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a
successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Servicer and (y) in the case of (i)(B), (ii), (iii), (iv) and
(v) above, the Trustee shall, at the direction of the Holders of each Class of
Regular Certificates evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Servicer and the Trustee,
terminate all of the rights and obligations of the Servicer as servicer under
this Agreement. Any such notice to the Servicer shall also be given to each
Rating Agency, the Depositor and the Seller. On or after the receipt by the
Servicer and the Trustee of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Certificates or
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of each Mortgage Loan and Related
Documents or otherwise. The Servicer agrees to cooperate with the Trustee (or
the applicable successor Servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the successor Servicer of all documents and
records requested by it to enable it to assume the
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Servicer's functions under this Agreement within ten Business Days subsequent
to such notice, the transfer within one Business Day subsequent to such notice
to the Trustee (or the applicable successor Servicer) for the administration
by it of all cash amounts that shall at the time be held by the Servicer and
to be deposited by it in the Collection Account, the Distribution Account, any
REO Account or any Escrow Account or that have been deposited by the Servicer
in such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the servicing to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer (or if the predecessor Servicer is
the Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer and the Trustee receives
a notice of termination or resignation pursuant to Section 7.01 or 6.04, the
Trustee (or such other successor Servicer as is approved in accordance with
this Agreement) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof arising on and after its succession. As compensation
therefor, the Trustee (or such other successor Servicer) shall be entitled to
such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if
the Trustee is unwilling to act as successor Servicer or (ii) if the Trustee
is legally unable so to act, the Trustee shall appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer having a
net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; PROVIDED, that the appointment of
any such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the Trustee and such successor
shall agree, not to exceed the Servicing Fee). The successor servicer shall be
entitled to withdraw from the Collection Account all costs and expenses
associated with the transfer of the servicing to the successor servicer. The
appointment of a successor servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer to pay any deductible under an insurance policy
pursuant to Section 3.12 or to indemnify the parties indicated in Section 3.26
pursuant to the terms thereof, nor shall any successor Servicer be liable for
any acts or omissions of the predecessor Servicer or for any breach by such
Servicer of any of its representations or warranties contained herein or in
any related document or agreement. The Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
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In the event of a Servicer Event of Termination, notwithstanding
anything to the contrary above, the Trustee and the Depositor hereby agree
that upon delivery to the Trustee by the Servicing Rights Pledgee of a letter
signed by the Servicer within ten Business Days of when notification of such
event shall have been provided to the Trustee, whereunder the Servicer shall
resign as Servicer under this Agreement, the Servicing Rights Pledgee or its
designee shall be appointed as successor Servicer (provided that at the time
of such appointment the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer set forth above) and the Servicing Rights
Pledgee agrees to be subject to the terms of this Agreement.
(b) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, PROVIDED, HOWEVER, that the Majority
Certificateholders may not waive a default in making a required distribution
on a Certificate without the consent of the Holder of such Certificate. Upon
any waiver of a past default, such default shall cease to exist and any
Servicer Event of Termination arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived. Notice of any such waiver shall be given by
the Trustee to the Rating Agencies.
Section 7.04 Notification to Certificateholders.
(a) On any termination or appointment of a successor the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute
a Servicer Event of Termination for five Business Days after a Responsible
Officer of the Trustee becomes aware of the occurrence of such an event, the
Trustee shall transmit by mail to all Certificateholders notice of such
occurrence unless such default or Servicer Event of Termination shall have
been waived or cured. Such notice shall be given to the Rating Agencies
promptly after any such occurrence.
Section 7.05 Survivability of Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Servicer hereunder, any liabilities of the Servicer which accrued prior to
such termination shall survive such termination.
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ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of a Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Servicer Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If a Servicer Event of Termination
has occurred (which has not been cured) of which a Responsible Officer has
actual knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement; PROVIDED, HOWEVER,
that the Trustee shall not be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Servicer, the Seller or the Depositor hereunder.
If any such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the
Certificateholders of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; PROVIDED, HOWEVER, that:
(i) prior to the occurrence of a Servicer Event of Termination, and
after the curing of all such Servicer Events of Termination which may
have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement;
(ii) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer of the Trustee unless it shall be
proved that the Trustee was negligent in ascertaining or investigating
the facts related thereto;
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Majority
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Certificateholders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising or
omitting to exercise any trust or power conferred upon the Trustee under
this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure
by the Servicer to comply with the obligations of the Servicer referred
to in clauses (i) and (ii) of Section 7.01(a) or any Servicer Event of
Termination unless a Responsible Officer of the Trustee at the applicable
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Servicer or the
Majority Certificateholders. In the absence of such receipt of such
notice, the Trustee may conclusively assume that there is no Servicer
Event of Termination.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of,
any of the obligations of the Servicer under this Agreement, except with
respect to the Trustee during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
The Trustee shall not have any duty (A) to see any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any
kind owing with respect to, assessed or levied against, any part of the Trust
Fund other than from funds available in the Distribution Account.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall not be under any obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation
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hereunder or in relation hereto, at the request, order or direction of
the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee to perform any discretionary act enumerated in this Agreement
shall not be construed as a duty, and the Trustee shall not be answerable
for other than its negligence or willful misconduct in the performance of
any such act;
(iv) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; PROVIDED, HOWEVER, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to such proceeding. The
reasonable expense of every such examination shall be paid by the
Servicer or, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand. Nothing in this clause (v) shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have any liability
or make any representation as to any acts or omissions hereunder of the
Servicer until such time as the Trustee may be required to act as
Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys or a custodian and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney or
custodian appointed by it with due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature
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of the Trustee and authentication of the Trustee on the Certificates) or of
any Mortgage Loan or Related Document. The Trustee shall not be accountable
for the use or application by the Servicer, or for the use or application of
any funds paid to the Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Servicer. The Trustee shall
not at any time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Mortgage or any Mortgage
Loan, or the perfection and priority of any Mortgage or the maintenance of any
such perfection and priority, or for or with respect to the sufficiency of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence
and enforceability of any hazard insurance thereon (other than if the Trustee
shall assume the duties of the Servicer pursuant to Section 7.02); the
validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the performance
or enforcement of any Mortgage Loan (other than if the Trustee shall assume
the duties of the Servicer pursuant to Section 7.02); the compliance by the
Depositor, the Seller or the Servicer with any warranty or representation made
under this Agreement or in any related document or the accuracy of any such
warranty or representation prior to the Trustee's receipt of notice or other
discovery of any non-compliance therewith or any breach thereof; any
investment of monies by or at the direction of the Servicer or any loss
resulting therefrom, it being understood that the Trustee shall remain
responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02), or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), taken in the name
of the Trustee; the failure of the Servicer to act or perform any duties
required of it as agent of the Trustee hereunder; or any action by the Trustee
taken at the instruction of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02); PROVIDED,
HOWEVER, that the foregoing shall not relieve the Trustee of its obligation to
perform its duties under this Agreement. The Trustee shall not have any
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Seller, the Servicer, the Depositor or their Affiliates.
Section 8.05 Seller to Pay Trustee Fees and Expenses.
The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself its fees in an aggregate amount equal to
the Trustee Fee pursuant to Section 4.01 and, to the extent the sum of the
Interest Remittance Amount is at any time insufficient for such purpose, the
Seller shall pay such fees as reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the
trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee, and the
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Seller will pay or reimburse the Trustee upon their request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from such party's negligence or bad faith
or which is the responsibility of Certificateholders or the Trustee hereunder.
Notwithstanding any other provision of this Agreement, including Section
2.03(a) and Section 2.04, to the contrary, the Seller covenants and agrees to
indemnify the Trustee and its respective officers, directors, employees and
agents from, and hold each of them harmless against, any and all losses,
liabilities, damages, claims or expenses incurred in connection with any legal
action relating to this Agreement, the Certificates or incurred in connection
with the administration of the Trust, other than with respect to a party, any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence of such party in the performance of their respective
duties hereunder or by reason of such party's reckless disregard of
obligations and duties hereunder. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action. The
Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified, to the extent not paid by the Seller pursuant to this Section, by
the Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the
Trustee, in the ordinary course of the Trustee's performance in accordance
with the provisions of this Agreement) incurred by the Trustee or such party
arising out of or in connection with the acceptance or administration of its
duties under this Agreement, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance by the Trustee of its duties under this Agreement or by reason of
the reckless disregard of the Trustee's obligations and duties under this
Agreement. This section shall survive termination of this Agreement or the
resignation or removal of any Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a Department of Housing
and Urban Development and Federal Housing Administration approved mortgagee,
an entity duly organized and validly existing under the laws of the United
States of America or any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P and a
long term debt rating of at least A1 or better by Xxxxx'x, and subject to
supervision or examination by federal or state authority. If such entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time
such Trustee is appointed Trustee to the effect that the Trust will not be a
taxable entity under the laws of such state. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.06, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
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Section 8.07 Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and having accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of their property shall be appointed, or any public
officer shall take charge or control of the Trustee or of their property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor may remove the Trustee. If the Depositor or the Servicer removes
the Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.
The Majority Certificateholders may at any time remove the Trustee
by written instrument or instruments delivered to the Servicer, the Depositor
and the Trustee and any expenses incurred by the Trustee in connection with
such removal shall be reimbursed to it by the Majority Certificateholders
promptly upon demand therefor; the Depositor shall thereupon use its best
efforts to appoint a successor Trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee
as provided in Section 8.08.
Section 8.08 Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Rating Agencies, the
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the
Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the
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provisions of Section 8.06 and the appointment of such successor Trustee shall
not result in a downgrading of the Regular Certificates by any Rating Agency,
as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment
of a successor Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to each Rating Agency.
Section 8.09 Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
entity succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such entity shall be eligible under the
provisions of Section 8.06 and 8.08, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located,
the Depositor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be
subject to the written approval of the Servicer. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, or in the case a Servicer Event of Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor Trustee under Section
8.06, and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08. The Servicer shall
be responsible for the fees of any co-trustee or separate trustee appointed
hereunder.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Servicer
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hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee, acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee
except that following the occurrence of a Servicer Event of Termination,
the Trustee acting alone may accept the resignation or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Depositor, the Rating Agencies and the
Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the
Certificates is made and intended not as a personal undertaking or agreement
by the Trustee but is made and intended for the purpose of binding only the
Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee for the benefit
of all Holders of such Certificates, subject to the provisions of this
Agreement. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses,
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disbursement and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment
has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable notice during normal business
hours, access to all records maintained by the Trustee in respect of its
duties hereunder and access to officers of the Trustee responsible for
performing such duties. The Trustee shall cooperate fully with the Seller, the
Servicer, the Depositor and such Certificateholder and shall make available to
the Seller, the Servicer, the Depositor and such Certificateholder for review
and copying at the expense of the party requesting such copies, such books,
documents or records as may be requested with respect to the Trustee's duties
hereunder. The Seller, the Depositor, the Servicer and the Certificateholders
shall not have any responsibility or liability for any action or failure to
act by the Trustee and are not obligated to supervise the performance of the
Trustee under this Agreement or otherwise.
Section 8.13 Suits for Enforcement.
In case a Servicer Event of Termination or other default by the
Servicer or the Seller hereunder shall occur and be continuing, the Trustee
may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution
of any power granted in this Agreement or for the enforcement of any other
legal, equitable or other remedy, as the Trustee, being advised by counsel,
and subject to the foregoing, shall deem most effectual to protect and enforce
any of the rights of the Trustee and the Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Compliance with National Housing Act of 1934.
In performing its duties hereunder with respect to FHA Loans, the
Trustee shall comply with all requirements of the National Housing Act of
1934, as amended.
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ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration.
(a) REMIC elections as set forth in the Preliminary Statement shall
be made by the Trustee on Form 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to each REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Servicer in fulfilling its
duties hereunder. The Servicer shall be entitled to reimbursement of expenses
to the extent provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, sign and file, all of the REMICs'
federal and state tax and information returns as the direct representative of
each REMIC created hereunder. The expenses of preparing and filing such
returns shall be borne by the Trustee.
(e) The Holder of the Residual Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the "Tax Matters Person") with respect to
each REMIC and shall act as Tax Matters Person for each REMIC. The Trustee, as
agent for the Tax Matters Person, shall perform on behalf of each REMIC all
reporting and other tax compliance duties that are the responsibility of such
REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or
other such guidance, the Trustee, as agent for the Tax Matters Person, shall
provide (i) to the Treasury or other governmental authority such information
as is necessary for the application of any tax relating to the transfer of a
Residual Certificate to any disqualified person or organization and (ii) to
the Certificateholders such information or reports as are required by the Code
or REMIC Provisions. The Trustee, as agent for the Tax Matters Person, shall
represent each REMIC in any administrative or judicial proceedings relating to
an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC, enter into
settlement agreements with any government taxing agency, extend any statute of
limitations relating to any item of any REMIC and otherwise act on behalf of
any REMIC in relation to any tax matter involving the Trust.
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(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of each REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status.
Neither the Trustee, the Servicer nor the Holder of any Residual Certificate
shall take any action, cause any REMIC created hereunder to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee and the Servicer have received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such status or result in
the imposition of such a tax. In addition, prior to taking any action with
respect to any REMIC created hereunder or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee and the Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur
with respect to any REMIC, and no such Person shall take any such action or
cause any REMIC to take any such action as to which the Trustee or the
Servicer has advised it in writing that an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by
a Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes
out of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out
of other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC.
(h) The Trustee, as agent for the Tax Matters Person, shall, for
federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC
created hereunder, except as expressly provided in this Agreement with respect
to Eligible Substitute Mortgage Loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services.
(k) On or before April 15th of each calendar year beginning in 2005,
the Servicer shall deliver to the Trustee and each Rating Agency an Officers'
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee will apply for an Employee Identification Number
from the Internal Revenue Service via a Form SS-4 or other acceptable method
for all tax entities and shall complete the Form 8811.
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(m) [Reserved].
(n) In the event that any Person holds pro rata shares of the
ownership of the Class N Certificates and the Class X Certificates (any such
person, a "Proportionate Holder"), the Trustee shall treat such Person as the
holder of the ownership of the same pro-rate share of the Class X Interest. In
the event that any Person holds non-pro rata shares of the ownership of the
Class N Certificates and the Class X Certificates (any such Person, a
"Disproportionate Holder"), the Trustee shall treat such Person, and all other
Disproportionate Holders, as partners in a partnership that owns the Class X
Interest (other than the shares of the Class X Interest held by any
Proportionate Holders) for federal income tax purposes and shall not treat the
Class N and Class X Certificates held by the Disproportionate Holders as
interest in any REMIC created hereunder. By acquiring the Class N Certificates
and the Class X Certificates, the respective Holders will agree to treat the
Class N Certificates and the Class X Certificates in the manner described in
the preceding sentences for federal income tax purposes. In such event, (i) a
separate capital account shall be established and maintained for each Holder
of a Class N or Class X Certificate in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv), which shall be credited with income or gain and
debited by any expenses or losses and distributions allocable to such
Certificates, (ii) the Class N Certificates shall be allocated income in an
amount equal to interest at the Pass-Through Rate thereon and any original
issue discount that would be reportable thereon if the Class N Certificate
were a debt instrument issued on the date ownership of the Class N and Class X
Certificates is separated, with a principal balance equal to its Notional
Amount, (iii) the Class X and Class N Certificates shall be allocated income
with respect to all prepayments penalties (including amounts in connection
with the full or partial waiver of such prepayment penalties or premiums
pursuant to Section 3.01) in accordance with the allocation of such amounts
pursuant to Section 4.02(c), to the extent not allocated pursuant to Section
9.01(n)(ii) above, (iv) the Class X and Class N Certificates shall be
allocated accruals (under any reasonable method) of any "cap premiums" deemed
received on the date ownership of the Class X and Class N Certificates is
separated in respect of the obligation of the Class X Interest to pay LIBOR
Carryover Amounts, and shall be allocated expense in respect of any actual
payment of such LIBOR Carryover Amounts based on which one of such Classes
economically bears such expense, (v) the Class X Certificates shall be
allocated all remaining income and any expenses and Realized Losses with
respect to the Class X Interest, until the capital account of the Class X
Certificates is reduced to zero, and any remaining expenses or losses shall be
allocated to the Class N Certificates, (vi) neither the Class N Certificates
nor the Class X Certificates shall be responsible for restoring any deficit to
its capital account, (vii) upon termination of the Trust Fund pursuant to
Article X, all amounts available for distribution to Holders of the Class N
and Class X Certificates shall be distributed in accordance with their
positive capital account balances, first to the Class N Certificates until
their Notional Amount and any accrued but unpaid interest thereon are reduced
to zero, and then to the Class X Certificates, and (viii) the Trustee shall
maintain books and records with respect to the partnership on a calendar year
basis (unless a different taxable year shall be required by the Code) and
shall prepare or cause to be prepared, and cause the Holder of the largest
Percentage Interest of the Class X Certificates to sign and file or cause to
be filed all federal and state tax and information returns for the
partnership, and shall furnish or cause to be furnished ScheduleK-1's to the
Holders of the Class N and Class X Certificates at the time required by the
Code. Unless otherwise directed by a majority of the Percentage Interests of
the Class X and Class N Certificates, the Trustee shall not make an election
under Section 754 of the Code. The
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Holder of the largest Percentage Interest of the Class X Certificates, by
acceptance of its Class X Certificate, agrees to act as "tax matters partner"
(within the meaning of Section 6231(a)(7) of the Code and to sign and timely
file all federal and state partnership tax and information returns prepared by
the Trustee pursuant to Section 9.01(n).
(o) The Trustee shall treat the LIBOR Carryover Reserve Account as
an outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
that is owned by the Class N and Class X Certificateholders and that is not an
asset of REMIC created hereunder. The Trustee shall treat the rights of the
Class A-1 Certificateholders to receive payments from the LIBOR Carryover
Reserve Account as rights in an interest rate cap contract written by the
Holders of the Class X Interest (in the case of amounts payable from the LIBOR
Carryover Reserve Account) in favor of the Class A-1 Certificateholders. Thus,
the Class A-1 Certificate shall be treated as representing ownership of not
only a REMIC Regular Interest, but also ownership of an interest in an
interest rate cap contract. For purposes of determining the issue price of the
REMIC Regular Interests, the Trustee shall assume that such interest rate cap
contract has a value of $10,000.
Section 9.02 Prohibited Transactions and Activities.
Neither the Seller, the Depositor, the Servicer nor the Trustee
shall sell, dispose of, or substitute for any of the Mortgage Loans, except in
a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC created
hereunder pursuant to Article X of this Agreement, (iv) a substitution
pursuant to Article II of this Agreement or (v) a repurchase of Mortgage Loans
pursuant to Article II of this Agreement, nor acquire any assets for any
REMIC, nor sell or dispose of any investments in the Distribution Account for
gain, nor accept any contributions to either REMIC after the Closing Date,
unless it has received an Opinion of Counsel (at the expense of the party
causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) affect adversely the
status of any REMIC created hereunder as a REMIC or of the interests therein
other than the Residual Certificates as the regular interests therein, (b)
affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement) or (d) cause any
REMIC created hereunder to be subject to a tax on prohibited transactions or
prohibited contributions pursuant to the REMIC Provisions.
Section 9.03 Indemnification With Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions
due to the negligent performance by the Servicer of its duties and obligations
set forth herein, the Servicer shall indemnify the Holder of the related
Residual Certificates against any and all losses, claims, damages, liabilities
or expenses ("Losses") resulting from such negligence; PROVIDED, HOWEVER, that
the Servicer shall not be liable for any such Losses attributable to the
action or inaction of the Trustee, the Depositor or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which
the Servicer has
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relied. The foregoing shall not be deemed to limit or restrict the rights and
remedies of the Holder of such Residual Certificate now or hereafter existing
at law or in equity. Notwithstanding the foregoing, however, in no event shall
the Servicer have any liability (1) for any action or omission that is taken
in accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Seller,
the Servicer, the Depositor, the Trustee and the Certificate Registrar created
hereby (other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate
upon notice to the Trustee upon the earliest of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero, (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust, and (iii) the optional purchase by the Servicer or
an Affiliate of the Servicer of the Mortgage Loans as described below.
Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
The Servicer or an Affiliate of the Servicer may, at its option,
terminate the Mortgage Loans in the Trust Fund and retire the Offered
Certificates, the Class B-3 Certificates and the Class B-4 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 Servicer, accrued and unpaid interest thereon at the weighted average of
the Mortgage Interest Rates through the end of the Collection Period preceding
the final Distribution Date plus unreimbursed Servicing Advances, Advances and
any unpaid Servicing Fees allocable to such Mortgage Loans and (ii) REO
Properties in the Trust Fund at a price equal to their fair market value as
determined in good faith by the Servicer (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account all amounts then on deposit in the Collection Account
(less amounts permitted to be withdrawn by the Servicer pursuant to Section
3.07), which deposit shall be deemed to have occurred immediately following
such purchase.
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Any such purchase shall be accomplished by delivery to the Trustee
for deposit into the Distribution Account as part of Available Funds on the
Determination Date before such Distribution Date of the Termination Price.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day of
the month preceding the month of such final distribution and not later than
the 15th day of the month of such final distribution specifying (1) the
Distribution Date upon which final distribution of the Certificates will be
made upon presentation and surrender of such Certificates at the office or
agency of the Trustee therein designated, (2) the amount of any such final
distribution and (3) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and Section
4.02 for such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for
the benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any
other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and
receive the final distribution with respect thereto. If within nine months
after the second notice all the Certificates shall not have been surrendered
for cancellation, the Residual Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject hereto and the Trustee
upon transfer of such funds shall be discharged of any responsibility for such
funds, and such Certificateholders shall look to the Residual
Certificateholders for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the Servicer exercises its purchase option as
provided in Section 10.01, the Trust shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section will not (i) result in
the imposition of taxes on "prohibited transactions" of the Trust as defined
in Section 860F of the Code or (ii) cause any REMIC constituting part of the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
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(i) The Trustee shall designate a date within 90 days prior to the
final Distribution Date as the date of adoption of plans of complete
liquidation of each REMIC and shall specify such date in the final
federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited in the following order of priority (A) (i) to the
Holders of the Class A Certificates and (ii) to the Class M-1, Class M-
2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates,
the related Certificate Principal Balance, as applicable, plus one
month's interest thereon at the applicable Pass-Through Rate, (B) to the
Class N and Class X Certificates in respect of the Class X/N Interest,
the amount of any remaining Monthly Excess Cash Flow Amounts not
previously distributed thereon, (C) to the remaining REMIC Regular
Interests the amounts allocable thereto pursuant to Section 4.08 and (D)
to the Class R and Class R-X Certificateholders, all cash on hand in
respect of the related REMIC or REMICs after such payment (other than
cash retained to meet claims) and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Seller, the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be defective or inconsistent with any other
provisions herein, (iii) to amend the provisions of Section 3.22 or (iv) to
make any other provisions with respect to matters or questions arising under
this Agreement, which shall not be inconsistent with the provisions of this
Agreement; PROVIDED, HOWEVER, that any such action listed in clause (i)
through (iv) above shall not adversely affect in any respect the interests of
any Certificateholder, as evidenced by (i) notice in writing to the Depositor,
the Servicer and the Trustee from the Rating Agencies that such action will
not result in the reduction or withdrawal of the rating of any outstanding
Class of Certificates with respect to which it is a Rating Agency, or (ii) an
Opinion of Counsel delivered to the Servicer and the Trustee.
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In addition, this Agreement may be amended from time to time by
Seller, the Depositor, the Servicer and the Trustee, with the consent of the
Majority Certificateholders for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
PROVIDED, HOWEVER, that no such amendment or waiver shall (x) reduce in any
manner the amount of, or delay the timing of, payments on the Certificates
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates (as evidenced by (i)
notice in writing to the Depositor, the Servicer and the Trustee from the
Rating Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class of Certificates with respect
to which it is a Rating Agency, or (ii) an Opinion of Counsel delivered to the
Servicer and the Trustee) in a manner other than as described in clause (x)
above, without the consent of the Holders of Certificates of such Class
evidencing at least a 66% Percentage Interest in such Class, or (z) reduce the
percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding. Upon
approval of an amendment, a copy of such amendment shall be sent to the Rating
Agencies. Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel (at
the expense of the Person seeking such amendment) stating that the execution
of such amendment is authorized or permitted by this Agreement. The Trustee
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's own rights, duties or immunities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense
of) the Person seeking such Amendment, to the effect that such amendment will
not result in the imposition of a tax on any REMIC constituting part of the
Trust Fund pursuant to the REMIC Provisions or cause any REMIC constituting
part of the Trust to fail to qualify as a REMIC at any time that any
Certificates are outstanding and that the amendment is being made in
accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Seller or the Servicer (but in no event at the expense of the
Trustee), otherwise at the expense of the Trust, a copy of such amendment and
the Opinion of Counsel referred to in the immediately preceding paragraph to
the Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other
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comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at the expense
of the Trust, but only upon direction of Certificateholders, accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute
but one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up of
the Trust, or (iii) otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue
of any provision of this Agreement to affect, disturb or prejudice the rights
of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.03 each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
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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 (without regard to
the conflicts of laws provisions thereof). With respect to any claim arising
out of this Agreement, each party irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in The City of New York,
and each party irrevocably waives any objection which it may have at any time
to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided
that service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by first class mail, postage prepaid, or by express delivery service,
to (a) in the case of the Seller, Credit-Based Asset Servicing and
Securitization LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Director - Mortgage Finance (telecopy number (000) 000-0000), or
such other address or telecopy number as may hereafter be furnished to the
Depositor and the Trustee in writing by the Seller, (b) in the case of the
Trustee, U.S. Bank National Association, 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx.
Xxxx, Xxxxxxxxx 00000-0000, Attn: Structured Finance-- X.X. Xxxxxx Acceptance
Corp. I, Series 2004-CB4, or such other address as may hereafter be furnished
to the Depositor, the Seller and the Servicer in writing by the Trustee, (c)
in the case of the Depositor, X.X. Xxxxxx Acceptance Corporation I, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: President, or such other address
as may be furnished to the Seller, the Servicer and the Trustee in writing by
the Depositor, and (d) in the case of the Servicer, Xxxxxx Loan Servicing LP,
0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxxx XxXxxxx, or
such other address as may be furnished to the Seller, the Depositor and the
Trustee in writing by the Servicer. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Notice of any Servicer Event of Termination shall be given by telecopy and by
certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any
notice required to be telecopied hereunder shall also be mailed to the
appropriate party in the manner set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
129
Section 11.07 Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or the Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Servicer or the Trustee;
(iv) the final payment to Holders of the Certificates of any Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(vii) In addition, the Servicer shall promptly furnish to each
Rating Agency copies of the following:
(A) each annual statement as to compliance described in Section
3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Servicer has not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing
and shall be deemed to have been duly given if personally delivered or mailed
by first class mail, postage prepaid, or by express delivery service to
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Managing Director, Residential Mortgage-Backed Securities; Dominion
Bond Rating Service, Inc., 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxxxx; and Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Surveillance Group.
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Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have
been provided reasonable security or indemnity against their out-of-pocket
expenses (including reasonable attorneys' fees) to be incurred in connection
therewith.
Section 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by agent duly appointed in writing; and such action shall become effective
when such instrument or instruments are delivered to the Trustee, the Seller
and the Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act"
of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Trustee and the Trust, if made in the manner provided in this Section
11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Whenever such execution is by a signer acting in a capacity other than his or
her individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Trust in reliance thereon, whether or not notation of such action is made
upon such Certificate.
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IN WITNESS WHEREOF, the Seller, the Depositor, the Servicer and the
Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
X.X. XXXXXX ACCEPTANCE CORPORATION I,
as Depositor
By: /s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
XXXXXX LOAN SERVICING LP, as Servicer
By: /s/ Xxxxxx XxXxxxx
-----------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ X. Xxxxxxxxxxxxxx
-----------------------------------
Name: X. Xxxxxxxxxxxxxx
Title: Vice President
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of July, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxxxxx Xxxxxxxxx, known to me to be an
Vice President of X.X. Xxxxxx Acceptance Corporation I, 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
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the __th day of July 2004 before me, a notary public in and for
said State, personally appeared Xxxx Xxxxxxx, known to me to be a Senior Vice
President of Credit-Based Asset Servicing and Securitization LLC, a limited
liability company that executed the within instrument, and also known to me to
be the person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the __th day of July 2004 before me, a notary public in and for
said State, personally appeared X. Xxxxxxxxxxxxxx, known to me to be a Vice
President of U.S. Bank National Association, a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said 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
000
XXXXX XX XXXXX )
) ss.:
COUNTY OF )
On the __th day of July 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx XxXxxxx, known to me to be a Senior
Vice President of Xxxxxx Loan Servicing LP, a Delaware limited partnership,
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited partnership, and acknowledged to me that
such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
136
EXHIBIT A-1
FORM OF 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 TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
A-1-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-1 Original Class Certificate Principal Balance of
the Class A-1 Certificates as of the Closing
Pass-Through Rate: Variable Date: $165,800,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $165,800,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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
C-BASS MORTGAGE LOAN TRUST 2004-CB4, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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
A-1-2
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the sum of one month LIBOR plus the
Class A-1 Certificate Margin and (ii) the related Rate Cap for the such
Distribution Date. Interest will accrue on the Class A-1 Certificates during
each Interest Accrual Period at the Class A-1 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-1-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-1-4
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.
A-1-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-1-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-1-7
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
A-1-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _________________________________________________ funds
to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF 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 TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
A-2-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-2 Original Class Certificate Principal Balance of
the Class A-2 Certificates as of the Closing
Pass-Through Rate: 4.104% Date: $ 20,700,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 20,700,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
A-2-2
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 or the
closing date in the case of the first 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.
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class A-2 Fixed Rate and (ii)
the related Rate Cap for the such Distribution Date. Interest will accrue on
the Class A-2 Certificates during each Interest Accrual Period at the Class
A-2 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-2-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-2-4
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.
A-2-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-2-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-2-7
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
A-2-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _________________________________________________ funds
to
_____________________________________________________________________________
_____________________________________________________________________________
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF 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 TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
A-3-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-3 Original Class Certificate Principal Balance of
the Class A-3 Certificates as of the Closing
Pass-Through Rate: 4.632% Date: $ 54,600,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 54,600,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
A-3-2
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 or the
closing date in the case of the first 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.
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class A-3 Fixed Rate and (ii)
the related Rate Cap for the such Distribution Date. Interest will accrue on
the Class A-3 Certificates during each Interest Accrual Period at the Class
A-3 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-3-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-3-4
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.
A-3-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-3-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-3-7
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
A-3-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
_____________________________________________________________________________
_____________________________________________________________________________
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-4 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
A-4-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-4
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-4 Original Class Certificate Principal Balance of
the Class A-4 Certificates as of the Closing
Pass-Through Rate: 5.497% Date: $32,300,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $32,300,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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-4 Certificates) in that certain beneficial ownership
interest evidenced by all the Class A-4 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
A-4-2
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 or the
closing date in the case of the first 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-4 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 Trustee 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-4 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-4 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class A-4 Fixed Rate and (ii)
the related Rate Cap for the such Distribution Date. Interest will accrue on
the Class A-4 Certificates during each Interest Accrual Period at the Class
A-4 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class A-4 Certificates.
The Class A-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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-4-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-4-4
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.
A-4-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-4-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-4-7
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
A-4-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _____________________________________________ funds to
______________________________________________________________________________
______________________________________________________________________________
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-5 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
0CERTIFICATE 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.
A-5-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-5
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-5 Original Class Certificate Principal Balance of
the Class A-5 Certificates as of the Closing
Pass-Through Rate: 6.280% Date: $24,583,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $24,583,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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
C-BASS MORTGAGE LOAN TRUST 2004-CB4, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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-5 Certificates) in that certain beneficial ownership
interest evidenced by all the Class A-5 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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
A-5-2
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 or the closing date in the case of the
first 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-5 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 Trustee 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-5 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-5 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class A-5 Fixed Rate and (ii)
the related Rate Cap for the such Distribution Date. Interest will accrue on
the Class A-5 Certificates during each Interest Accrual Period at the Class
A-5 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class A-5 Certificates.
The Class A-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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-5-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-5-4
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.
A-5-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-5-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-5-7
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
A-5-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ____________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS A-6 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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.
A-6-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS A-6
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class A-6 Original Class Certificate Principal Balance of
the Class A-6 Certificates as of the Closing
Pass-Through Rate: 5.372% Date: $ 33,100,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 33,100,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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
C-BASS MORTGAGE LOAN TRUST 2004-CB4, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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-6 Certificates) in that certain beneficial ownership
interest evidenced by all the Class A-6 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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
A-6-2
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 or the closing date in the case of the
first 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-6 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 Trustee 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-6 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class A-6 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class A-6 Fixed Rate and (ii)
the related Rate Cap for the such Distribution Date. Interest will accrue on
the Class A-6 Certificates during each Interest Accrual Period at the Class
A-6 Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class A-6 Certificates.
The Class A-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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer 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
A-6-3
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
A-6-4
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.
A-6-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
A-6-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
A-6-7
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
A-6-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
_____________________________________________________________________________
_____________________________________________________________________________
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-0
XXXXXXX X-0
FORM OF CLASS B-1 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST HEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
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
B-1-1
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER PROPERTY.
B-1-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS B-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class B-1 Original Class Certificate Principal Balance of the Class B-1
Certificates as of the Closing Date:
Pass-Through Rate: 6.464% $ 3,956,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 3,956,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 B-1 Certificates) in that certain beneficial ownership
interest evidenced by all the Class B-1 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I. (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
B-1-3
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 or the
closing date in the case of the first 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 B-1 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 Trustee 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 B-1 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class B-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class B-1 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class B-1 Certificates during each Interest Accrual Period at the Class B-1
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class B-1 Certificates.
The Class B-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 Account and the 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 the Class M 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller and
the Trustee with the consent of the Holders of Certificates
B-1-4
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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
B-1-5
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
B-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
B-1-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
B-1-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
------------------------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
--------------------------------------------
Signature Guaranteed
B-1-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-00
XXXXXXX X-0
FORM OF CLASS B-2 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B-1 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A
B-2-1
"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.
B-2-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS B-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class B-2 Original Class Certificate Principal Balance of
the Class B-2 Certificates as of the Closing
Pass-Through Rate: 6.662% Date: $ 3,956,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 3,956,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 B-2 Certificates) in that certain beneficial ownership
interest evidenced by all the Class B-2 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
B-2-3
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 or the
closing date in the case of the first 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 B-2 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 Trustee 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 B-2 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class B-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class B-2 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class B-2 Certificates during each Interest Accrual Period at the Class B-2
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class B-2 Certificates.
The Class B-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 Account and the 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, the Class M Certificates and the Class B-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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the
B-2-4
Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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
B-2-5
Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Principal Balance of the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
B-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
B-2-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
B-2-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
------------------------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
--------------------------------------------
Signature Guaranteed
B-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to___________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-00
XXXXXXX X-0
FORM OF CLASS B-3 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE
CLASS B-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CLASS B-3 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING
B-3-1
SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER
REFERRED TO IN THE PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE
POOLING AND SERVICING AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED
TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND
WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
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.
B-3-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS B-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class B-3 Original Class Certificate Principal Balance of
the Class B-3 Certificates as of the Closing
Pass-Through Rate: 6.750% Date: $ 3,956,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 3,956,000.000
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 B-3 Certificates) in that certain beneficial ownership
interest evidenced by all the Class B-3 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
B-3-3
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 or the
closing date in the case of the first 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 B-3 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 Trustee 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 B-3 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class B-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class B-3 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class B-3 Certificates during each Interest Accrual Period at the Class B-3
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class B-3 Certificates.
The Class B-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 Account and the 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, the Class M Certificates, the Class B-1 Certificates and the
Class B-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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the
B-3-4
Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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
B-3-5
Mortgage Loans at the time of purchase being 10% or less of the Cut-off Date
Principal Balance of the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
B-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
B-3-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
B-3-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code,
and Taxpayer Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
------------------------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
--------------------------------------------
Signature Guaranteed
B-3-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
X-0-00
XXXXXXX X-0
FORM OF CLASS B-4 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS
B-2 CERTIFICATES AND THE CLASS B-3 CERTIFICATES AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS B-4 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.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY
B-4-1
THE REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
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.
B-4-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS B-4
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class B-4 Original Class Certificate Principal Balance of
the Class B-4 Certificates as of the Closing
Pass-Through Rate: 6.750% Date: $3,758,000.00
Date of Pooling and Servicing Agreement and Initial Certificate Principal Balance:
Cut-off Date: June 1, 2004 $ 3,758,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 B-4 Certificates) in that certain beneficial ownership
interest evidenced by all the Class B-4 Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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.
B-4-3
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 or the
closing date in the case of the first 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 B-4 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 Trustee 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 B-4 Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class B-4 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class B-4 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class B-4 Certificates during each Interest Accrual Period at the Class B-4
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and
representing a Percentage Interest in the Class B-4 Certificates.
The Class B-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 Account and the 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, the Class M Certificates, the Class B-1 Certificates, the Class
B-2 Certificates and the Class B-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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the
B-4-4
Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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) that the Depositor and the Certificate Registrar shall require 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 or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate
Registrar nor 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 and any 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 herein 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
B-4-5
accounts in which such plans, accounts or arrangements are invested that are
subject to the fiduciary responsibility provisions of ERISA and Section 4975
of the Code ("Plans") or any person who is directly or indirectly purchasing
this Certificate or interest herein on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan unless the opinion letter in section 5.02
of the Pooling and Servicing Agreement is provided.
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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
B-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
B-4-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
B-4-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
------------------------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
--------------------------------------------
Signature Guaranteed
B-4-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
_____________________________________________________________________________
_____________________________________________________________________________
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
B-4-10
EXHIBIT C-1-1
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, THE CLASS
B-3 CERTIFICATES AND THE CLASS B-4 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 THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
THE PROCEDURES DESCRIBED HEREIN.
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
C-1-2-1
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 A 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.
C-1-2-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS R
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class R Servicer: Xxxxxx Loan Servicing LP
Date of Pooling and Servicing Agreement and Trustee: U.S. Bank National Association
Cut-off Date: June 1, 2004
Closing Date: July 7, 2004
First Distribution Date: July 26, 2004
No. 1
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Residual Interest Investments, L.P. is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class R Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among X.X. Xxxxxx Acceptance Corporation I
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Servicer, the Seller 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 or the
closing date in the case of the first 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 R Certificates on such Distribution
Date pursuant to the Agreement.
C-1-2-3
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 Trustee 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 Certificates the aggregate Percentage Interest of which is in excess
of a 66% Percentage Interest of the Class R 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 Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS 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 R 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 Account and the 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 Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
C-1-2-4
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) that the Depositor and the Certificate Registrar shall require 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 or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate
Registrar nor 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 and any 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 herein 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 and Section 4975 of the Code ("Plans") or
any person who is directly or indirectly purchasing this Certificate or
interest herein 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.
C-1-2-5
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-1-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-1-2-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-1-2-8
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
C-1-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _____________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-1-2-10
EXHIBIT C-1-2
FORM OF CLASS R-X 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 FOUR 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-X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES, THE B-3
CERTIFICATES AND THE CLASS B-4 CERTIFICATES OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS R-X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
THE PROCEDURES DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-X 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
C-1-2-1
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-X 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 A CLASS R- X 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-X
CERTIFICATE.
C-1-2-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS R-X
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class R-X Servicer: Xxxxxx Loan Servicing LP
Date of Pooling and Servicing Agreement and Trustee: U.S. Bank National Association
Cut-off Date: June 1, 2004
First Distribution Date: July 26, 2004 Closing Date: July 7, 2004
No. 1
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Xxxxxxx X. Xxxxxx is the registered owner of a
Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R-X Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller 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 or the
closing date in the case of the first 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 R-X Certificates on such
Distribution Date pursuant to the Agreement.
C-1-2-3
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 Trustee 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-X Certificates the aggregate Percentage Interest of which is in excess
of a 66% Percentage Interest of the Class R-X 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 Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS 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 R-X 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 Account and the 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 Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
C-1-2-4
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) that the Depositor and the Certificate Registrar shall require 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 or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate
Registrar nor 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 and any 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 herein 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 and Section 4975 of the Code ("Plans") or
any person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan unless the opinion letter in Section 5.02 of the Pooling and
Servicing Agreement is provided.
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 four 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.
C-1-2-5
The Depositor, the Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-1-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-1-2-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-1-2-8
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
C-1-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to___________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-1-2-10
EXHIBIT C-2
FORM OF CLASS M-1 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
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
C-2-1
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER PROPERTY.
C-2-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS M-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class M-1 Original Class Certificate Principal
Balance of the Class M-1 Certificates
as of the Closing Date
$17,800,000.00
Pass-Through Rate: 5.774%
Date of Pooling and Servicing Agreement and Cut-off Initial Certificate Principal Balance:
Date: June 1, 2004 $17,800,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National
Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined
C-2-3
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 or the
closing date in the case of the first 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.
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class M-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class M-1 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class M-1 Certificates during each Interest Accrual Period at a the Class M-1
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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.
C-2-4
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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
C-2-5
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 Principal Balance of the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-2-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-2-8
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
C-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-2-10
EXHIBIT C-3
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 TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND THE CLASS M-1 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
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
C-3-1
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER PROPERTY.
C-3-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS M-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class M-2 Original Class Certificate Principal
Balance of the Class M-2 Certificates
as of the Closing Date
$ 15,822,000.00
Pass-Through Rate: 6.267%
Date of Pooling and Servicing Agreement and Cut-off Initial Certificate Principal Balance:
Date: June 1, 2004 $ 15,822,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National
Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined
C-3-3
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 or the
closing date in the case of the first 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.
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class M-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class M-2 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class M-2 Certificates during each Interest Accrual Period at a the Class M-2
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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.
C-3-4
This certificate is subordinated in right of payment to the Class A
Certificates and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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
C-3-5
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 Principal Balance of the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-3-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-3-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-3-8
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
C-3-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-3-10
EXHIBIT C-4
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 TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO
ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A)
THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO TITLE I 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"), (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON
BEHALF OF OR INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT, THAT THE SOURCE
OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL
ACCOUNT." EACH PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN
SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH
PERSON SHALL HAVE PROVIDED SUCH REPRESENTATION LETTER REFERRED TO IN THE
PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR. THE POOLING AND SERVICING
AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF
THESE TRANSFER RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN
ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A
C-4-1
"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.
C-4-2
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS M-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class M-3 Original Class Certificate Principal
Balance of the Class M-3 Certificates
as of the Closing Date
$ 3,956,000.00
Pass-Through Rate: 6.365%
Date of Pooling and Servicing Agreement and Cut-off Initial Certificate Principal Balance:
Date: June 1, 2004 $ 3,956,000.00
First Distribution Date: July 26, 2004 Servicer: Xxxxxx Loan Servicing LP
No. 1 Trustee: U.S. Bank National
Association
CUSIP: 00000XXX0 Closing Date: July 7, 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 X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Cede & Co. 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 X.X. Xxxxxx Acceptance Corporation I (hereinafter called
the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Seller and the Trustee, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined
C-4-3
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 or the
closing date in the case of the first 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.
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 Trustee 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 the aggregate Initial Certificate Principal Balance of
which is in excess of $5,000,000, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the 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 Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided
in the Agreement.
The Class M-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the lesser of (i) the Class M-3 Fixed Rate and (ii)
the related Rate Cap for such Distribution Date. Interest will accrue on the
Class M-3 Certificates during each Interest Accrual Period at a the Class M-3
Pass-Through Rate.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan 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 Account and the 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.
C-4-4
This certificate is subordinated in right of payment to the Class A
Certificates, the Class M-1 Certificates and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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
C-4-5
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 Principal Balance of the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-4-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-4-7
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-4-8
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
C-4-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-4-10
EXHIBIT C-5
FORM OF CLASS X 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 IN CERTAIN OTHER PROPERTY.
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES, THE CLASS
B-3 CERTIFICATES AND THE CLASS B-4 CERTIFICATES OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
THE PROCEDURES DESCRIBED HEREIN.
C-5-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS X
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class X Servicer: Xxxxxx Loan Servicing LP
Date of Pooling and Servicing Agreement and Trustee: U.S. Bank National Association
Cut-off Date: June 1, 2004
First Distribution Date: July 26, 2004 Closing Date: July 7, 2004
No. 1
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Credit-Based Asset Servicing and Securitization
LLC is the registered owner of a Percentage Interest set forth above in that
certain beneficial ownership interest evidenced by all the Class X
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among X.X. Xxxxxx
Acceptance Corporation I (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Servicer, the Seller
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 or the
closing date in the case of the first 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
C-5-2
Certificate and the amount required to be distributed to the Holders of Class
X 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 Trustee 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 X Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of a 66% Percentage Interest of the Class X 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
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS 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 X 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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller 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 Trustee 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
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in
C-5-3
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) that the Depositor and the Certificate Registrar shall require 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 or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate
Registrar nor 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 and the 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 herein 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 and Section 4975 of the Code ("Plans") or
any person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan unless the opinion letter in section 5.02 of the Pooling and
Servicing Agreement is provided.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee 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 Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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
C-5-4
Depositor, the Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-5-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-5-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-5-7
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
C-5-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available ______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-5-9
EXHIBIT C-6
FORM OF CLASS N CERTIFICATE
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 IN CERTAIN OTHER PROPERTY.
THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES, THE CLASS
B-3 CERTIFICATES AND THE CLASS B-4 CERTIFICATES OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
THE PROCEDURES DESCRIBED HEREIN.
C-6-1
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB4, CLASS N
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of fixed-rate and adjustable-rate one- to
four-family first and second lien mortgage loans formed and sold by
X.X. XXXXXX ACCEPTANCE CORPORATION I
Series 2004-CB4, Class N Original Class N Notional Amount as of the
Closing Date: $14,600,000
Pass-Through Rate: 5.50% per annum Initial Notional Amount: $14,600,000
Date of Pooling and Servicing Agreement and Servicer: Xxxxxx Loan Servicing LP
Cut-off Date: June 1, 2004
First Distribution Date: July 26, 2004 Trustee: U.S. Bank National Association
No. 1 Closing Date: July 7, 2004
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN X.X.
XXXXXX ACCEPTANCE CORPORATION I, THE SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that Credit-Based Asset Servicing and Securitization
LLC is the registered owner of a Percentage Interest (obtained by dividing the
Initial Notional Amount of this Certificate by the Original Class N Notional
Amount) in that certain beneficial ownership interest evidenced by all the
Class N Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among X.X.
Xxxxxx Acceptance Corporation I (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Seller 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
C-6-2
immediately preceding the month in which the related Distribution Date occurs
or the closing date in the case of the first 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 N 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 Trustee 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 N Certificates the aggregate Initial Certificate Principal Balance of
which is in excess of a 66% Percentage Interest of the Class N 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
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS 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 N 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 Account and the 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 Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Seller 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 Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
C-6-3
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations 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) that the Depositor and the Certificate Registrar shall require 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 or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate
Registrar nor 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 and the 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 herein 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 and Section 4975 of the Code ("Plans") or
any person who is directly or indirectly purchasing this Certificate or
interest herein on behalf of, as named fiduciary of, as trustee of, or with
assets of a Plan unless the opinion letter in section 5.02 of the Pooling and
Servicing Agreement is provided.
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.
C-6-4
The Depositor, the Servicer and the Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, 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 Servicer, 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 Trustee 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 Principal Balance of
the Mortgage Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no 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.
C-6-5
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly executed.
Dated: July ___, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By:
-----------------------------------
Authorized Signatory
Date of authentication: July ___, 2004
C-6-6
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 (State)
in common
Additional abbreviations may also be used though not in the above
list.
C-6-7
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
C-6-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available _______________________________________________ funds to
------------------------------------------------------------------------------
------------------------------------------------------------------------------
for the account of _______________________________, account number
____________, or, if mailed by check, to
_____________________________________________________________. Applicable
statements should be mailed to_______________________________________________
_____________________________________________________________________________.
This information is provided by ___________________________, the assignee
named above, or ________________________________________, as its agent.
C-6-9
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(Available Upon Request)
D-1
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[FILED BY PAPER]
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Pooling and Servicing Agreement dated as of June 1, 2004 among
X.X. Xxxxxx Acceptance Corporation I, as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller,
Xxxxxx Loan Servicing LP, as servicer and U.S. Bank National
Association, as trustee
----------------------------------------------------------------
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced
above.
In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____1. Mortgage Paid in Full
_____2. Foreclosure
_____3. Substitution
_____4. Other Liquidation (Repurchases, etc.)
_____5. Nonliquidation Reason:
By:
-------------------------------------
(authorized signer)
Issuer:
Address:
Date:
E-1
Custodian
The Bank of New York
Please acknowledge the execution of the above request by your
signature and date below:
Signature Date
Documents returned to Custodian:
Custodian Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S OR CUSTODIAN'S INITIAL CERTIFICATION
SEE EXHIBIT 2A TO THE CUSTODIAL AGREEMENT
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
SEE EXHIBIT 2B TO THE CUSTODIAL AGREEMENT
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
[Bank of New York Letterhead]
ACKNOWLEDGMENT OF RECEIPT
July 7, 2004
U.S. Bank National Association,
as Trustee for C-BASS
Mortgage Loan Asset-Backed
Certificates, Series 2004-C43
00 Xxxxxxxxxx Xxx,
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Custodial Agreement dated as of June 1, 2004 among U.S. Bank
National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 4 of the
above-referenced Custodial Agreement, the undersigned, as the Custodian,
hereby certifies as to each Mortgage Loan in the Mortgage Schedule that (i) it
has received the original Mortgage Note with respect to each Mortgage Loan
identified in the Mortgage Loan Schedule attached hereto as Exhibit A and (ii)
such Mortgage Note has been reviewed by it and appears regular on its face and
relates to such Mortgage Loan. The Custodian makes no representations as to
(i) the validity, legality, enforceability, sufficiency, due authorization or
genuineness of any of the documents contained in each Custodial File or of any
of the Mortgage Loans or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Mortgage
Note as agent and bailee of, and custodian for the exclusive use and benefit,
and subject to the sole direction of the Trustee pursuant to the terms and
conditions of the Custodial Agreement.
This Acknowledgment of Receipt is not divisible or negotiable.
The Custodian will accept and act on instructions with respect to
the Mortgage Loans subject hereto upon surrender of this Trust Receipt and
Initial Certification at the office of the Subcustodian at Bank of New York
Western Trust Company, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxx.
F-3-1
Capitalized terms used herein shall have the meaning ascribed to
them in the Custodial Agreement.
THE BANK OF NEW YORK,
as Custodian
By:
------------------------------------
F-3-2
EXHIBIT G
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
G-1
==============================================================================
EXECUTION COPY
X.X. XXXXXX ACCEPTANCE CORPORATION I
as Purchaser
and
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed Rate and Adjustable Rate Mortgage Loans
C-BASS Mortgage Loan Asset-Backed Certificates, 2004-CB4
Dated as of June 1, 2004
==============================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................................................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans......................................................................................2
Section 2.02 Obligations of Seller Upon Sale.............................................................................2
Section 2.03 Payment of Purchase Price for the Mortgage Loans............................................................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to
the Mortgage Loans..........................................................................................5
Section 3.02 Seller Representations and Warranties......................................................................14
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller....................................................................................17
ARTICLE V
OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS
ARTICLE VI
TERMINATION
Section 6.01 Termination................................................................................................17
SECTION VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment..................................................................................................18
i
Section 7.02 Governing Law..............................................................................................18
Section 7.03 Notices....................................................................................................18
Section 7.04 Severability of Provisions.................................................................................18
Section 7.05 Counterparts...............................................................................................19
Section 7.06 Further Agreements.........................................................................................19
Section 7.70 Intention of the Parties...................................................................................19
Section 7.08 Successors and Assigns; Assignment of this Agreement.......................................................19
Section 7.09 Survival...................................................................................................20
Schedule I Mortgage Loan Schedule
Exhibit I Appendix E of the Standard & Poor's Glossary For File Format For LEVELS(R)
Version 5.6 Revised
ii
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of June 1, 2004, (the
"AGREEMENT"), between CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
("C-BASS" or the "SELLER") and X.X. XXXXXX ACCEPTANCE CORPORATION I (the
"PURCHASER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, 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"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"MORTGAGES") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (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; and
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 June 1, 2004 (the "Pooling And Servicing Agreement"), among the
Seller as seller, the Purchaser, as depositor, Xxxxxx Loan Servicing LP
("Xxxxxx"), as servicer, and U.S. Bank National Association, as trustee (the
"Trustee"), the Purchaser will convey the Mortgage Loans to the 2004-CB4
Trust.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
"Custodian": A custodian acceptable to the Trustee, which may be the
Trustee and which shall not be the Seller or any affiliate of the Seller.
The initial Custodian shall be The Bank of New York.
"Insurance Agreement": With respect to any FHA Mortgage Loan, the
insurance contract issued by the FHA.
P-2
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 SALE OF MORTGAGE LOANS.
(a) 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, all its right, title and interest, in and to (i) each Mortgage
Loan 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; and (v) all proceeds of any of the foregoing.
(b) The Seller, concurrently with the execution and delivery of this
Agreement does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, all proceeds 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 included
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, the Seller, on
behalf of the Purchaser, does hereby deliver or cause to be delivered to, and
deposit with the Trustee, or its designated agent (the "Custodian"), the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or
(B) in the following form: "Pay to the order of U.S. Bank National
Association, as Trustee under the Pooling and Servicing Agreement,
dated as of June 1, 2004, among Credit-Based Asset Servicing and
Securitization LLC, X.X. Xxxxxx Acceptance Corporation I, Xxxxxx
Loan Servicing LP and U.S. Bank National Association, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB4, without
recourse," or with respect to any lost Mortgage Note, an original
lost note affidavit, together with a copy of the related Mortgage
Note;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of attorney has been submitted
for recording but has not been returned from the applicable public
2
recording office, has been lost or is not otherwise available, a
copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted
for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A)
in blank or (B) to "U.S. Bank National Association, as Trustee under
the Pooling and Servicing Agreement, dated as of June 1, 2004, among
Credit-Based Asset Servicing and Securitization LLC, X.X. Xxxxxx
Acceptance Corporation I, Xxxxxx Loan Servicing LP and U.S. Bank
National Association, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB4, without recourse";
(iv) an original or a certified copy of any intervening
assignment of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy;
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vii) for each FHA Loan, the original Mortgage Insurance
Certificate.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y)
has been lost or such public recording office has retained the original of
such document, the obligations of the Seller to deliver such documents shall
be deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in
the case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of written notice by the Seller of any
materially defective document in, or that a document is missing from, a
Mortgage File, the Seller shall have 120 days to cure such defect or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments
(or within 90 days of the earlier of the Seller's discovery or receipt of
notification if such defect would cause the Mortgage Loan not to be a
"qualified mortgage" for REMIC purposes) or deliver such missing document to
the Trustee or the Custodian. If the Seller does not cure such defect or
deliver such missing document within such time period, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with Section
3.01 hereof.
3
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 this
Agreement.
(b) The Seller shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv)
hereof to be recorded. The Seller shall be required to deliver such
assignments for recording within 30 days of the Closing Date. The Seller shall
furnish the Trustee, or its designated agent, with a copy of each assignment
of Mortgage submitted for recording. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Seller shall
promptly have a substitute Assignment prepared or have such defect cured, as
the case may be, and thereafter cause each such Assignment to be duly
recorded.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Seller shall cause to be
completed such endorsements in the following form: "Pay to the order of U.S.
Bank National Association, as Trustee under the Pooling and Servicing
Agreement, dated as of June 1, 2004, among Credit-Based Asset Servicing and
Securitization LLC, X.X. Xxxxxx Acceptance Corporation I, Xxxxxx Loan
Servicing LP and U.S. Bank National Association, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4, without recourse."
Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS. In
consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on
the Closing Date by transfer of immediately available funds, as directed by
the Seller, an amount equal to $375,592,893 in respect of the Mortgage Loans
(the "Purchase Price"), net of an expense reimbursement amount of $181,000
(the "Expense Reimbursement Amount"), and to transfer to the Seller or its
designee on the Closing Date, (i) a portion of the Class B-2 Certificates and
(ii) the Class B-3, the Class B-4, the Class X, the Class N, and the Residual
Certificates (collectively, the "Private Certificates"). The Expense
Reimbursement Amount shall reimburse the Purchaser for the Purchaser's
Securities and Exchange Commission registration statement fees and the
Purchaser's registration statement administration fees allocable to the Trust.
The Seller shall pay, and be billed directly for, all expenses incurred by the
Purchaser in connection with the issuance of the
4
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. If the Purchaser shall determine that the
Expense Reimbursement Amount is not sufficient to reimburse the Purchaser for
all expenses incurred by it that are subject to reimbursement by the Seller
hereunder as described above, the Seller shall promptly reimburse the
Purchaser for such additional amounts upon written notice by the Purchaser to
the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Seller hereby represents and warrants to the Purchaser,
with respect to the Mortgage Loans, that as of the Closing Date or as of such
date specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date.
(b) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property.
(c) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary
to maintain the lien priority of the Mortgage and the interests of the
Certificateholders, and which have been delivered to the Trustee; the
substance of any such waiver, alteration or modification has been approved by
the title insurer, to the extent required by the related policy, and is
reflected on the Mortgage Loan Schedule. No instrument of waiver, alteration
or modification has been executed, and no Mortgagor has been released, in
whole or in part, except, in connection with an assumption agreement approved
by the title insurer, to the extent required by the policy and, in the case of
an FHA Loan, to the extent required by the related Insurance Agreement, and
which assumption agreement has been delivered to the Trustee and the terms of
which are reflected in the Mortgage Loan Schedule.
(d) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(e) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as
5
are customary in the area where the Mortgaged Property is located, pursuant to
insurance policies conforming to the requirements of the Pooling and Servicing
Agreement. All such insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns as mortgagee and all premiums
thereon have been paid. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration is in effect which policy conforms to the
requirements of the Federal National Mortgage Association ("FNMA") and the
Federal Home Loan Mortgage Corporation ("FHLMC"). The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost
and expense, and on the Mortgagor's failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at the Mortgagor's cost and expense
and to seek reimbursement therefor from the Mortgagor. All acts required to be
performed to preserve the rights and remedies of the Trustee in any such
insurance policies have been performed, including, without limitation, any
necessary notifications of insurers and assignments of policies or interests
therein.
(f) As of the date of origination of the Mortgage Loan, any and all
requirements of any federal, state or local law, including, without
limitation, usury, truth in lending, real estate settlement procedures,
consumer credit protection, equal credit opportunity or disclosure laws
applicable to the origination of the Mortgage Loans have been complied with.
Any and all requirements of any federal, state or local law, including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the servicing of the Mortgage Loans have been complied
with.
(g) The Mortgage has not been satisfied, canceled, subordinated
(other than with respect to second lien loans, the subordination to the first
lien loan) rescinded, in whole or in part, and the Mortgaged Property has not
been released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
cancellation, subordination, rescission or release.
(h) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (1) the lien of current real property taxes
and assessments not yet due and payable, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record
as of the date of recording being acceptable to mortgage lending institutions
generally and, in the case of FHA Loans, to the FHA, and specifically referred
to in the lender's title insurance policy delivered to the originator of the
Mortgage Loan, (3) 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 and which may not in any way prevent
realization of the benefits of the related Insurance Agreement, if applicable
and (4) with respect to any second lien mortgage loan, the lien of the related
first mortgage loan. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first or second lien
and first or second priority
6
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser.
(i) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable
in accordance with its terms.
(j) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the
mortgagee to advance additional funds thereunder and any and all requirements
as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage have been paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due to the mortgagee pursuant to the
Mortgage Note or Mortgage.
(k) Immediately prior to the transfer and assignment contemplated
herein, the Seller was the sole owner and holder of the Mortgage Loans and has
good and marketable title to each Mortgage Loan, free and clear of any and all
liens, pledges, charges, claims, participation interests, mortgages, security
interests or encumbrances or other interests of any nature and has full right
and authority to sell and assign the same.
(l) Each Mortgage Loan is covered by an ALTA mortgagee title
insurance policy acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to (1) FNMA and FHLMC, in the case of a conventional Mortgage Loan
and (2) the FHA, in the case of an FHA Loan, and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (h)(1) and (2) above) the Seller, its successors
and assigns as to the first or second priority lien of the Mortgage in the
original principal amount of the Mortgage Loan and against any loss by reason
of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the mortgage interest
rate and/or monthly payment including any negative amortization thereunder.
Additionally, such mortgagee title insurance policy affirmatively insures
ingress and egress to and from the Mortgaged Property, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such mortgagee title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in
full force and effect upon the consummation of the transactions contemplated
by this Agreement. No claims have been made under such mortgagee title
insurance policy, and no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything which would impair the coverage
of such mortgagee title insurance policy.
(m) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage.
(n) The collection practices used by the Servicer with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper,
prudent and customary in the mortgage servicing industry.
7
(o) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (1) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (2) otherwise
by judicial foreclosure. There is no homestead or other exemption available to
the Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage. The
Mortgagor has not notified the Seller and the Seller has no knowledge of any
relief requested or allowed to the Mortgagor under the Servicemembers Civil
Relief Act, 50 U.S.C. App. xx.xx. 501-596, enacted on December 19, 2003, as
amended.
(p) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage.
(q) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
(r) No Mortgage Loan contains provisions pursuant to which monthly
payments are (1) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (2) paid by any source other than the Mortgagor or (3) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature.
(s) The Mortgage Note, the Mortgage, the Assignment and any other
documents required to be delivered with respect to each Mortgage Loan pursuant
to Section 2.02 hereof have been delivered to the Purchaser or its designee,
all in compliance with the specific requirements of Section 2.02 hereof.
(t) If the residential dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets FNMA's eligibility requirements.
(u) None of the Mortgage Loans are secured by a leasehold estate or
constitute other than real property under applicable state law.
(v) The rights with respect to each Mortgage Loan are assignable by
the Seller without the consent of any Person other than consents which will
have been obtained on or before the Closing Date.
(w) The Mortgage Loans are not being transferred by the Seller with
any intent to hinder, delay or defraud any creditors of the Seller.
8
(x) All parties which have had any interest in each Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, and including, without
limitation, the Seller, are (or during the period in which they held and
disposed such interest, were) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the property securing
the Mortgage is located to the extent that any noncompliance thereunder would
affect the value or marketability of the Mortgage Loans.
(y) To the best of Seller's knowledge, the Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or
regulation.
(z) The Mortgaged Property is free from material damage.
(aa) Each Mortgage Loan has been serviced by the Servicer in
accordance with the terms thereof and Applicable Regulations.
(bb) [Reserved]
(cc) [Reserved]
(dd) There is no proceeding pending for the total or partial
condemnation and no eminent domain proceedings pending affecting any Mortgaged
Property.
(ee) There was no fraud involved in the origination of any Mortgage
Loan by the applicable mortgagee or Mortgagor, and to the best of the Seller's
knowledge, there was no fraud by the appraiser or any other party involved in
the origination of any such Mortgage Loan.
(ff) Each mortgage file contains an appraisal of or a broker's price
opinion regarding the related Mortgaged Property indicating an appraised value
equal to the appraised value identified for such Mortgaged Property on the
Mortgage Loan Schedule. Each appraisal has been prepared on FNMA or FHLMC
forms.
(gg) No improvements on any Mortgaged Property encroach on adjoining
properties (and in the case of a condominium unit, such improvements are
within the project with respect to that unit), and no improvements on
adjoining properties encroach upon such Mortgaged Property unless there exists
in the applicable Mortgage File a title policy with endorsements which insure
against losses sustained by the insured as a result of such encroachments.
(hh) Each Insurance Agreement is in full force and effect and will
be in full force and effect upon the consummation of the transactions
contemplated by this Agreement.
(ii) With respect to escrow deposits, if any, all such payments are
in the possession of, or under the control of, the Servicer and there exists
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Servicer have been capitalized under any
Mortgage or the related Note.
9
(jj) No Mortgage Loan is subject to any pending bankruptcy or
insolvency proceeding. To the Seller's best knowledge, no material litigation
or lawsuit relating to any Mortgage Loan is pending.
(kk) The Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans acquired by the Seller.
(ll) The sale, transfer, assignment and conveyance of Mortgage Loans
by the Seller pursuant to this Agreement will not result in any tax, fee or
governmental charge (other than income taxes and related taxes) payable by the
Seller, the Depositor or the Trustee to any federal, state or local government
other than taxes which have or will be paid by the Seller as due ("Transfer
Taxes"). In the event that the Depositor or the Trustee receives actual notice
of any Transfer Taxes arising out of the transfer, assignment and conveyance
of the Mortgage Loans, other than any taxes to be paid by the creditor, on
written demand by the Depositor, or the Trustee, or upon the Seller's
otherwise being given notice thereof by the Depositor or the Trustee, the
Seller shall pay, and otherwise indemnify and hold the Depositor and the
Trustee harmless, on an after-tax basis, from and against any and all such
Transfer Taxes (it being understood that the Certificateholders, the Trustee
and the Depositor shall have no obligation to pay such Transfer Taxes).
(mm) With respect to each Mortgage Loan that is a "mortgage" as such
term is defined in 15 U.S.C. 1602(aa), no obligor has or will have a claim or
defense under such Mortgage Loan as a result of a violation of the Home
Ownership and Equity Protection Act of 1994.
(nn) With respect to the Mortgage Loans, the Mortgaged Properties
securing repayment of the related Mortgage Note, consists of a fee simple
interest in a single parcel or two contiguous parcels of real property (i)
improved by a (A) detached or semi-detached one-family dwelling, (B) detached
or semi-detached two-to four family dwelling, (C) one-family unit in a FNMA
eligible condominium project, (D) detached or semi-detached one-family
dwelling in a planned unit development, (E) multi-family dwelling or townhouse
or (F) mobile home or manufactured dwelling which constitutes real property or
(ii) unimproved by any residential dwelling.
(oo) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the 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 default, breach, violation or event of acceleration, and
the Seller has not waived any default, breach, violation or event of
acceleration except, in the case of an FHA Loan, by written instruments, and
the substance of which waiver has been approved by the FHA to the extent
required by the applicable Insurance Agreement.
(pp) The Seller has no actual knowledge that with respect to any
Mortgage Loan (1) the Servicer has sent a notice of default to the related
Mortgagor which the Servicer is currently seeking to enforce, or (2) any
foreclosure proceedings have been commenced or acceleration been declared
which is currently pending. The Seller is not transferring any
10
Mortgage Loan to the Purchaser with the intention or knowledge that the
Purchaser or the Trust will acquire the related Mortgaged Property.
(qq) With respect to any Mortgage Loan that is secured by a second
lien on the related Mortgaged Property, either (i) no consent for the Mortgage
Loan is required by the holder of any related senior lien or (ii) such consent
has been obtained and is contained in the Mortgage File.
(rr) In any case in which a Mortgage Loan is secured by a second
lien and a senior lien on the related Mortgaged Property provides for negative
amortization or deferred interest, the balance of such senior lien on the
related Mortgaged Property used to calculate the Combined Loan to Value Ratio
for the Mortgage Loan is based on the maximum amount of negative amortization
possible under such senior loan.
(ss) With respect to a Mortgage Loan which is a second lien, as of
the date hereof, the Seller has not received a notice of default of a senior
lien on the related Mortgaged Property which has not been cured.
(tt) No Mortgage Loan is delinquent. 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 event of
acceleration, with respect to any Mortgage Loan.
(uu) Each Mortgage Loan is a "qualified Mortgage" within the meaning
of Section 860 G(a)(3) of the Code. (vv) With respect to any Adjustable-Rate
Mortgage Loan, all rate adjustments have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any.
(ww) At the time of their origination, all FHA Loans conformed to
HUD origination guidelines.
(xx) Each Mortgage Loan is directly secured by a Mortgage on a
residential property, and either (1) substantially all of the proceeds of the
Mortgage Loan were used to acquire, improve or protect the portion of the
residential property that consists of an interest in real property (within the
meaning of Treasury Regulations Sections 1.856-3(c) and 1.856-3(d)) and the
interest in real property was the only security for the Mortgage Loan as of
the Testing Date (as defined below), or (2) the fair market value of the
interest in real property which secures the Mortgage Loan was at least equal
to 80% of the principal amount of the Mortgage Loan (a) as of the Testing
Date, or (b) as of the Closing Date. For purposes of the previous sentence,
(1) the fair market value of the referenced interest in real property shall
first be reduced by (a) the amount of any lien on the interest in real
property that is senior to the Mortgage Loan, unless the Mortgage Loan
includes both a first lien loan and a second lien loan on the same Mortgaged
Property, in which case the 80% test shall be applied in the aggregate, and
(b) a proportionate amount of any lien on the interest in real property that
is on a parity with the Mortgage Loan, and (2) the "Testing Date" shall be the
date on which the referenced Mortgage Loan was originated unless (a) the
Mortgage Loan was modified after the date of its origination in a manner that
would cause "significant modification" of the Mortgage Loan within the meaning
of Treasury
11
Regulations Section 1.1001-3, and (b) the "significant modification" did not
occur at a time when the Mortgage Loan was in default or when default with
respect to the Mortgage Loan was reasonably foreseeable.
(yy) With respect to each Mortgage Loan that is a mobile or
manufactured housing unit, such unit is a "single family residence" within the
meaning of Section 25(e)(1) of the Code, and has a minimum of 400 square feet
of living space, a minimum width of 102 inches and is of a kind customarily
used at a fixed location.
(zz) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved the application of the Seller's underwriting
standards or some assessment of the Mortgagor's ability to repay the Modified
Mortgage Loan.
(aaa) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in violation of any
state law or ordinance similar to HOEPA.
(bbb) No proceeds from any Mortgage Loan were used to finance
single- premium credit insurance policies.
(ccc) No Mortgage Loan originated on or after October 1, 2002 will
impose a Prepayment Charge for a term in excess of three years. Any Mortgage
Loan originated prior to such date will not impose a Prepayment Charge in
excess of five years.
(ddd) The Servicer has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
(eee) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003, which is
secured by property located in the State of Georgia.
(fff) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home loan" as
defined under the Georgia Fair Lending Act ("GFLA").
(ggg) (a) No Mortgage Loan is classified as a high cost mortgage
loan under HOEPA; and (b) no Mortgage Loan in the Trust Fund is a "high cost
home," "covered" (excluding home loans defined as "covered home loans"
pursuant to clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002), "high risk home" or "predatory" loan under
any other applicable state, federal or local law (or a similarly classified
loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having
high interest rates, points and/or fees).
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(hhh) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including,
but not limited to, all applicable predatory and abusive lending laws.
(iii) None of the Mortgage Loans are High Cost as defined by the
applicable predatory and abusive lending laws.
(jjj) No Mortgage Loans are subject to the GFLA effective from
October 1, 2002 to March 6, 2003.
(kkk) The Prepayment Charges included in the transaction are
enforceable and were originated in compliance with all federal, state and
local laws.
(lll) All mortgage loans are originated in compliance with state,
local, and federal laws.
(mmm) No Mortgage Loan is a High Cost Loan or a Covered Loan, as
applicable (as such terms are defined in Appendix E of the Standard & Poor's
Glossary For File Format For LEVELS(R) Version 5.6 Revised (attached hereto as
Exhibit 1); provided that no representation and warranty is made in this
clause 3.01(mmm) with respect to any Mortgage Loan secured by property located
in the states of Kansas or West Virginia, the City of Los Angeles, California
or the City of Oakland, California.
With respect to the representations and warranties set forth in
Section 3.01(aaa), (bbb), (ccc), (ddd), (eee), (fff), (ggg) and (mmm) that are
made to the best of the Seller's knowledge or as to which the Seller has no
knowledge, if it is discovered by the Depositor, the Seller, the Servicer or
the Trustee, as set forth in Section 2.04 of the Pooling and Servicing
Agreement, that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee for the benefit of the
Certificateholders then, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate
at the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
Upon discovery by the Depositor, the Seller, the Servicer, 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 or
Section 2.04 of the Pooling and Servicing Agreement 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 for the
benefit of the Certificateholders, the party discovering the breach shall give
prompt written notice to the others and in no event later than two Business
Days from the date of such discovery. It is understood by the parties hereto
that a breach of the representations and warranties made in this Section 3.01
will be deemed to materially and adversely affect the value of the related
Mortgage Loan or the interest therein of the Purchaser or the Purchaser's
assignee. 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
defect or breach
13
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.
Upon discovery or receipt of written notice by the Seller of any
materially defective document in, or that a document is missing from, a
Mortgage File, the Seller shall have 120 days to cure such defect or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments
(or within 90 days of the earlier of the Seller's discovery or receipt of
notification if such defect would cause the Mortgage Loan not to be a
"qualified mortgage" for REMIC purposes) or in the event such defect 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, within such time
periods and 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 its agent, on behalf of the Purchaser 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 defective
Mortgage Loan constitute the sole remedies of the Purchaser, the
Certificateholders or the Trustee on their behalf respecting a missing or
defective document or 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:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to transact the
business in which it is currently engaged. The Seller is duly qualified to do
business and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a
material adverse effect on (a) its business, properties, assets or condition
(financial or other), (b) the performance of its obligations under this
Agreement, (c) the value or marketability of the Mortgage Loans, or (d) its
ability to foreclose on the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the transactions
contemplated hereunder and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the Seller's legal, valid and
binding obligations enforceable in accordance with its terms, except as
enforcement of such terms may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
14
equitable remedies, (2) general equity principals (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (3) public
policy considerations underlying the securities laws, to the extent that such
policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is presently conducted, except for such licenses, certificates
and permits the absence of which, individually or in the aggregate, would not
have a material adverse effect on the ability of the Seller to conduct its
business as it is presently conducted. It is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau
or agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses,
approvals or authorizations, or registrations or declarations as shall have
been obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or constitute a
default under, any provision of any existing law or regulation or any order or
decree of any court applicable to the Seller or any of its properties or any
provision of its Limited Liability Company Agreement, or constitute a material
breach of, or result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to any mortgage, indenture,
contract or other agreement to which it is a party or by which it may be
bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of
any pending insolvency.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to any
order or decree of any court, or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the Seller's condition (financial or
otherwise) or operations or any of the Seller's properties, or materially and
adversely affect the performance of any of its duties hereunder.
(ix) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely,
would prohibit the Seller from entering into this Agreement and the Pooling
and Servicing Agreement, (ii) seeking to prevent the consummation
15
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 and the Pooling and Servicing
Agreement.
(x) The Seller is not transferring the Mortgage Loans to the
Purchaser hereunder with any intent to hinder, delay or defraud any of its
creditors.
(xi) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller pursuant to this Agreement are not subject to
the bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(xiii) The Seller understands that (a) the Private Certificates have
not been and will not be registered or qualified under the Securities Act of
1933, as amended (the "SECURITIES ACT") or any state securities law, (b) the
Purchaser is not required to so register or qualify the Private Certificates,
(c) the Private Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities law, or if an
exemption from such registration and qualification is available, (d) the
Pooling and Servicing Agreement contains restrictions regarding the transfer
of the Private Certificates and (e) the Private Certificates will bear a
legend to the foregoing effect.
(xiv) The Seller is acquiring the Private Certificates for its own
account for investment only and not with a view to or for sale in connection
with any distribution thereof in any manner that would violate the Securities
Act or any applicable state securities laws.
(xv) The Seller is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and, in particular, in such matters related to securities similar to
the Private Certificates, such that it is capable of evaluating the merits and
risks of investment in the Private Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor" within the
meaning of Rule 501 (a) promulgated pursuant to the Securities Act.
(xvi) The Seller has been furnished with such information concerning
the Private Certificates and the Purchaser as has been requested by the Seller
from the Purchaser and is relevant to the Seller's decision to purchase the
Private Certificates. The Seller has had any questions arising from such
review answered by the Purchaser to the satisfaction of the Seller.
(xvii) The Seller has not and will not nor has it authorized or will
it authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Private Certificate, any interest in any Private Certificate or
any other similar security to any person in any manner, (b) solicit any offer
to buy or to accept a pledge, disposition of other transfer of any Private
Certificate, any interest in any Private Certificate or any other similar
security from any person in any manner, (c) otherwise approach or negotiate
with respect to any Private Certificate, any interest in any Private
Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner or (e)
16
take any other action, that (as to any of (a) through (e) above) would
constitute a distribution of any Private Certificate under the Securities Act,
that would render the disposition of any Private Certificate a violation of
Section 5 of the Securities Act or any state securities law, or that would
require registration or qualification pursuant thereto. The Seller will not
sell or otherwise transfer any of the Private Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.
(xviii) The Seller is not an employee benefit plan or other
retirement arrangement subject to 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"), (collectively, an "ERISA Plan"), and is not
acting on behalf of, as named fiduciary of, as trustee of, or investing the
assets of an ERISA Plan.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 COVENANTS OF THE SELLER.
(a) 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.
(b) The Seller hereby covenants that neither it nor any affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller
nor any affiliate of the Seller shall be deemed to directly solicit any
Mortgagor if the Seller responds to a request from a Mortgagor regarding a
refinancing or if the Mortgagor receives marketing materials which are
generally disseminated.
ARTICLE V
OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS
(a) On or after June 1, 2004, as to any Mortgage Loan which is
Delinquent in payment by 120 days or more or any REO Property, an Affiliate of
the Seller may, at its option, purchase such Mortgage Loan from the Trust Fund
at the Purchase Price for such Mortgage Loan provided that an Affiliate of the
Seller may exercise the purchase right during the period commencing on the
first day of the calendar quarter succeeding the calendar quarter in which the
17
Initial Delinquency Date occurred and ending on the last Business Day of such
calendar quarter. The "Initial Delinquency Date" of a Mortgage Loan shall mean
the date on which the Mortgage Loan first became 120 days Delinquent.
(b) If an Affiliate of the Seller does not exercise the purchase
right with respect to a Mortgage Loan during the period specified in the
preceding paragraph, such Mortgage Loan shall thereafter again become eligible
for purchase pursuant to the preceding paragraph only after the Mortgage Loan
ceases to be 120 days or more Delinquent and thereafter becomes 120 days
Delinquent again.
ARTICLE VI
TERMINATION
Section 6.01 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 Section 8.01 of the
Trust Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 AMENDMENT. This Agreement may be amended from time to
time by the Seller and the Purchaser, by written agreement signed by the
Seller and the Purchaser.
Section 7.02. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
Section 7.03 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:
if to the Seller:
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 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:
X.X. Xxxxxx Acceptance Corporation I
000 Xxxx Xxxxxx, 00xx Xxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
or such other address as may hereafter be furnished to the Seller in writing
by the Purchaser.
Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions 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 7.05 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 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or reasonable and appropriate to
effectuate the purposes of this Agreement or in connection with the issuance
of any Series of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller,
the Seller will cooperate with the Purchaser in connection with the sale of
any of the securities representing interests in the Mortgage Loans. In that
connection, the Seller will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request
and will provide to the Purchaser such additional representations and
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Seller as are reasonably
required in connection with such transactions and the offering of investment
grade securities rated by the Rating Agencies.
Section 7.07 INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than 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 7.08 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
19
shall be at the Purchaser's sole discretion, except that the Purchaser
acknowledges and agrees that the Seller may assign its obligations hereunder
to any Person into which the Seller is merged or any corporation resulting
from any merger, conversion or consolidation to which the Seller is a party or
any Person succeeding to the business of the Seller. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of contributing them to a trust that will issue a series of certificates
representing undivided interests in such Mortgage Loans. As an inducement to
the Purchaser to purchase the Mortgage Loans, the Seller acknowledges and
consents to the assignment by the Purchaser to the Trustee of all of the
Purchaser's rights against the Seller pursuant to this Agreement insofar as
such rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller pursuant to
this Agreement by the Trustee. Such enforcement of a right or remedy by the
Trustee shall have the same force and effect as if the right or remedy had
been enforced or exercised by the Purchaser directly.
Section 7.09 SURVIVAL. The representations and warranties set forth
in Sections 3.01 and 3.02 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.
X.X. XXXXXX ACCEPTANCE CORPORATION I,
as Purchaser
By: /s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
20
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 U.S. Bank
National Association, as trustee on behalf of C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004- CB4, to accept the transfer of the
above described loan from Seller.
Seller agrees to indemnify and hold harmless U.S. Bank National
Association, X.X. Xxxxxx Acceptance Corporation I, X.X. Xxxxxx Securities
Inc., Citigroup Global Markets Inc. and Xxxxxxxx & Partners, LP for any losses
incurred by such parties resulting from the above described promissory note
has been lost or misplaced.
By:
------------------------------------
Name:
Title:
H-1
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that
any representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
My commission expires _____________________________.
H-2
EXHIBIT I
FORM OF ERISA REPRESENTATION
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
X.X. Xxxxxx Acceptance Corporation I
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
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 X.X. Xxxxxx Acceptance
Corp. I, as depositor (the "Depositor"), Credit-Based Asset Servicing and
Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as servicer and U.S.
Bank National Association, as trustee (the "Trustee"), no transfer of the
ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Depositor and the 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"), 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 Residual, Class X or Class N
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 a
Mezzanine or Residual 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 and holding of such Certificate by the Transferee will not result in
the assets of the Trust Fund being deemed to be plan assets and subject to the
prohibited transaction provisions of ERISA or the Code and will not subject
the Trustee, the Certificate Registrar 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 Trustee or
the Depositor.
I-1
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:
I-2
EXHIBIT J-1
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
X.X. Xxxxxx Acceptance Corporation I
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10017
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4 (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
J-1-1
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
X-0-0
XXXXXXX X-0
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
X.X. Xxxxxx Acceptance Corporation I
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10017
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4 (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
J-2-1
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
J-2-2
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ (1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
-----------------
(1) Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $__________ in securities.
J-2-3
___ 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
J-2-4
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:
J-2-5
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,
J-2-6
(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:
J-2-7
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB4
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 a [Class R and/or Class R-X
Certificates] (the "Certificates") issued pursuant to the Pooling and
Servicing Agreement, (the "Agreement"), relating to the above- referenced
Certificates, among X.X. Xxxxxx Acceptance Corporation I, as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller, Xxxxxx Loan
Servicing LP, as servicer and U.S. Bank National Association, 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 Certificates to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificates if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
K-1
5. The Transferee has reviewed the provisions of Section 5.02(d) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificates including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificates. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificates, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit K to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificates.
8. The Transferee's taxpayer identification number is _______.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificates may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code, nor are we
acting on behalf of such a plan.
12. The Transferee will not transfer the Certificates, directly or
indirectly, to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
13. The Transferee will not cause income from the Certificates to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
14. Either
(a) (i) At the time of the transfer, and at the close of each
of the Transferee's two fiscal years preceding the Transferee's
fiscal year of transfer, the Transferee's gross assets for financial
reporting purposes exceed $100 million and
K-2
its net assets for financial reporting purposes exceed $10 million.
For purposes of the preceding sentence, the gross asses and net
assets of a Transferee do not include any obligation of any Related
Person, as defined below, or any other asset if a principal purpose
for holding or acquiring the other asset is to permit the Transferee
to satisfy the conditions of this paragraph 15(a); (ii) The
Transferee is an Eligible Corporation, as defined below, and hereby
agrees that any subsequent transfer of the interest will be to
another Eligible Corporation in a transaction that satisfies this
Transfer Affidavit, including this paragraph 15(a); and (iii) The
Transferee has not given the Transferor any reason to know that the
Transferee will not honor the restrictions on subsequent transfers
of the residual interest or that the Transferee will not honor the
restrictions on subsequent transfers of the residual interest or
that the Transferee cannot or will not pay any taxes associated with
the residual interest; or
(b) (i) The Transferee is a United States Person; (ii) The
present value of the anticipated tax liabilities associated with
holding the residual interest does not exceed the sum of: (A) The
present value of any consideration given to the Transferee to
acquire the interest; (B) The present value of the expected future
distributions on the interest; and (C) The present value of the
anticipated tax savings associated with holding the interest as any
REMIC generates losses; and (iii) For purposes of calculating the
aforementioned present values: (A) The Transferee has assumed that
it pays tax at a rate equal to the highest rate of tax specified in
Code Section 11(b)(1) (unless the Transferee has been subject to the
alternative minimum tax under Code Section 55 in the preceding two
years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate, in which case the
Transferee can assume that it pays tax at the rate specified in Code
Section 55(b)(1)(B) provided the Transferee states in this Transfer
Affidavit that it is using such alternate rate and that has been
subject to the alternative minimum tax under Code Section 55 in the
preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate) and (B)
The Transferee uses a discount rate equal to the Federal short-term
rate prescribed by section 1274(d) for the month of the transfer and
the compounding period used by the Transferee.
The term "Eligible Corporation" means any domestic C corporation (as
defined in Section 1361(a)(2) of the Code) other than a corporation which is
exempt from, or is not subject to, tax under section 11 of the Code, an entity
described in section 851(a) or 856(a) of the Code, a REMIC; or an organization
to which part I, subchapter T, chapter 1, subtitle A of the Code applies. The
Term "Related Person" means any person that bears a relationship to the
Transferee enumerated in section 267(b) or 707(b)(1) of the Code, using "20
percent" instead of "50 percent" where it appears under the provisions; or is
under common control (within the meaning of Section 52(a) and (b) of the Code)
with the Transferee.
K-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this day of , 20 .
[NAME OF TRANSFEREE]
By:
------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
[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__.
K-4
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
X.X. Xxxxxx Acceptance Corporation I
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB4 (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) [in the case of a Residual Certificate only] to the
extent we are disposing of a Class [R, or R-X] Certificate, we have no
knowledge the Transferee is not a Permitted Transferee and (d) [in the case of
a Residual Certificate only] no purpose of the proposed disposition of a Class
[R, or R-X] Certificate is to impede the assessment or collection of tax.
Very truly yours,
[TRANSFEROR]
By:
------------------------------------
Name:
Title:
L-1
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY SERVICER
1. With respect to the Mortgage Pool, the number and Principal Balances of
all Mortgage Loans which were the subject of Principal Prepayments during
the related Due Period.
2. With respect to the Mortgage Pool, the amount of all curtailments which
were received during the related Due Period.
3. With respect to the Mortgage Pool, the aggregate amount of principal
portion of all Monthly Payments received during the related Due Period.
4. With respect to the Mortgage Pool, the amount of interest received on the
Mortgage Loans during the related Due Period.
5. With respect to the Mortgage Pool, the aggregate amount of the Advances
made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the delinquency and foreclosure
information and the amount of Mortgage Loan Losses during the related Due
Period.
7. With respect to the Mortgage Pool, the weighted average maturity, the
weighted average Mortgage Interest Rate and the weighted average Net
Mortgage Interest Rate as of the last day of the Due Period preceding of
the related Interest Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during the related Due
Period.
9. The amount of all payments or reimbursements to the Servicer paid or to
be paid since the prior Distribution Date (or in the case of the first
Distribution Date, since the Closing Date).
10. The Pool Balance.
11. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Due Period.
12. The aggregate interest accrued on the Mortgage Loans at their respective
Mortgage Interest Rates for the related Due Period.
13. The amount deposited in the Collection Account which may not be withdrawn
therefrom pursuant to an Order of a United States Bankruptcy Court of
competent jurisdiction imposing a stay pursuant to Section 362 of U.S.
Bankruptcy Code.
14. The aggregate Realized Losses since the Cut-off Date as of the end of the
related Due Period.
M-1
15. The LIBOR Carryover Amount for the Offered Certificates and the Class B-4
Certificates, if any, with respect to such Distribution Date.
16. The Overcollateralized Amount, the Targeted Overcollateralization Amount
and any Overcollateralization Deficiency, in each case after giving
effect to distributions on such Distribution Date.
M-2
EXHIBIT N
FORM OF OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
[DATE]
VIA FACSIMILE
U.S. Bank National Association, Trustee
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Prepayments
Dear Sir or Madam:
__________________ hereby certifies that he/she is an officer of the
Servicer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Mortgage Loans set forth in the attached
schedule:
1. A Principal Prepayment in full was received during the related
Collection Period;
2. Any prepayment penalty due under the terms of the Mortgage Note
with respect to such Principal Prepayment in full was received
from the mortgagor and deposited in the Collection Account: ___
Yes____ No
3. As to each Mortgage Loan so noted on the attached schedule, all
or part of the prepayment penalty required in connection with
the Principal Prepayment in full was waived based upon (Circle
one):
(i) the Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage
Loan, taking into account the value of such prepayment penalty,
or
(ii)(A) the enforceability thereof be limited (1) by bankruptcy
insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other
involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law;
N-1
4. We certify that all amounts due in connection with the waiver
of a prepayment penalty inconsistent with number 3 above which
are required to be deposited by the Servicer pursuant to
Section 3.01 of the Pooling and Servicing Agreement, have been
or will be so deposited.
Capitalized terms used herein shall have the meanings ascribed to
such terms in the Pooling and Servicing Agreement, dated June 1, 2004, among
X.X. Xxxxxx Acceptance Corporation I, as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as
servicer and U.S. Bank National Association, as trustee.
XXXXXX LOAN SERVICING LP
By:
------------------------------------
Name:
Title:
N-2
EXHIBIT O-1
FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER WITH FORM 10-K
Certification
1. I have reviewed this annual report on Form 10-K, and all reports
on Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of X.X. Xxxxxx
Acceptance Corporation I, Series 2004-CB4, C-BASS Mortgage Loan Asset-Backed
Certificates;
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 trustee by the servicer under the pooling and
servicing, or similar, agreement, for inclusion in these reports is included
in these reports;
4. Based on my knowledge and upon the annual compliance statement
included in the report and required to be delivered to the trustee in
accordance with the terms of the pooling and servicing, or similar, agreement,
and except as disclosed in the reports, the servicer has fulfilled its
obligations under the servicing agreement; and
5. The reports disclose all significant deficiencies relating to the
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 pooling and servicing, or similar,
agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: U.S. Bank
National Association.
XXXXXX LOAN SERVICING LP
By:
------------------------------------
Name:
Title:
Date:
O-1-1
EXHIBIT O-2
FORM OF CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY THE TRUSTEE
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB4
I, [identify the certifying individual], certify to Xxxxxx Loan
Servicing LP (the "Servicer"), and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification,
that:
1. I have reviewed the annual report on Form 10 K for the fiscal
year [___], and all reports on Form 8-K containing Monthly Statements filed in
respect of periods included in the year covered by that annual report, of X.X.
Xxxxxx Acceptance Corporation I (the "Depositor") relating to the above
referenced trust;
2. Subject to paragraph 4 hereof, based on my knowledge, the
Distribution Information in the Monthly Statements prepared by the Trustee,
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading as
of the last day of the period covered by that annual report; and
3. Based on my knowledge, the Distribution Information required to
be provided by the Trustee under the Pooling and Servicing Agreement is
included in these reports.
4. In compiling the Distribution Information and making the
foregoing certifications, the Trustee has relied upon information furnished to
it by the Servicer under the Pooling and Servicing Agreement. The Trustee
shall have no responsibility or liability for any inaccuracy in such reports
resulting from information so provided to it by the Servicer.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2004
(the "Pooling and Servicing Agreement"), among the Depositor, Credit-Based
Asset Servicing and Securitization LLC, as seller, the Servicer, and U.S. Bank
National Association, as trustee.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
------------------------------------
Name:
Title:
Date:
O-2-1
EXHIBIT P
FORM OF POWER OF ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
XXXXXX LOAN SERVICING LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn:
---------------------------------
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that U.S. Bank National Association,
having its principal place of business at 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000, as Trustee (the "Trustee") pursuant to that Pooling and
Servicing Agreement among X.X. Xxxxxx Acceptance Corporation I (the
"Depositor"), Xxxxxx Loan Servicing LP (the "Servicer"), and the Trustee,
dated as of June 1, 2004 (the "Pooling and Servicing Agreement"), hereby
constitutes and appoints the Servicer, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place
and stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for
the purpose of performing all acts and executing all documents in the name of
the Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.
This appointment shall apply to the following enumerated
transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of Trust
as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to
an easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution or requests to trustees to accomplish same.
P-1
3. The conveyance of the properties to the mortgage insurer, or the
closing of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
4. The completion of loan assumption agreements.
5. The full satisfaction/release of a Mortgage or Deed of Trust or
full conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
6. The assignment of any Mortgage or Deed of Trust and the related
Mortgage Note, in connection with the repurchase of the mortgage loan secured
and evidenced thereby.
7. The full assignment of a Mortgage or Deed of Trust upon payment
and discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related Mortgage
Note.
8. With respect to a Mortgage or Deed of Trust, the foreclosure, the
taking of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any
such foreclosure, including, without limitation, any and all of the following
acts:
a. the substitution of trustee(s) serving under a Deed
of Trust, in accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach
or non-performance;
c. the preparation and filing of notices of default
and/or notices of sale;
d. the cancellation/rescission of notices of default
and/or notices of sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents
and performance of such other actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to expeditiously
complete said transactions in paragraphs 8.a. through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority
to execute such instruments and to do and perform all and every act and thing
necessary and proper to carry into effect the power or powers granted by or
under this Limited Power of Attorney as fully as the undersigned might or
could do, and hereby does ratify and confirm to all that said Attorney-in-Fact
shall lawfully do or cause to be done by authority hereof.
P-2
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of attorney; and may be satisfied
that this Limited Power of Attorney shall continue in full force and effect
and has not been revoked unless an instrument of revocation has been made in
writing by the undersigned.
P-3
IN WITNESS WHEREOF, U.S. Bank National Association as Trustee
pursuant to that Pooling and Servicing Agreement among the Depositor, the
Servicer, and the Trustee, dated as of June 1, 2004 (C-BASS Mortgage Loan
Trust, Series 2004-CB4, C-BASS Mortgage Loan Asset-Backed Certificates), has
caused its corporate seal to be hereto affixed and these presents to be signed
and acknowledged in its name and behalf by _______ its duly elected and
authorized Vice President this _____ day of ______, 200__.
as Trustee for C-BASS Mortgage Loan Trust, Series
2004-CB4, C-BASS Mortgage Loan
Asset-Backed Certificates
By
----------------------------------------
X-0
XXXXX XX
------------------------
XXXXXX XX
-----------------------
Xx ___________, 200__, before me, the undersigned, a Notary Public in and for
said state, personally appeared ___________, Vice President of U.S. Bank
National Association as Trustee for C-BASS Mortgage Loan Trust, Series
2004-CB4 C-BASS Mortgage Loan Asset-Backed Certificates, personally known to
me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed that same in his/her authorized
capacity, and that by his/her signature on the instrument the entity upon
behalf of which the person acted and executed the instrument.
WITNESS my hand and official seal.
(SEAL)
------------------------------------
Notary Public
My Commission Expires ________________________
P-5
