EXHIBIT 4.1
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6
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EXECUTION VERSION
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BOND SECURITIZATION, L.L.C.,
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 January 1, 2005
2005-CB1 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS........................................................8
Section 1.01 Defined Terms..................................................8
Section 1.02 Accounting....................................................49
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES................................................................49
Section 2.01 Conveyance of Mortgage Loans..................................49
Section 2.02 Acceptance by Trustee.........................................51
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Seller........................................................53
Section 2.04 Representations and Warranties of the Seller with Respect
to the Mortgage Loans.........................................56
Section 2.05 Representations, Warranties and Covenants of the Servicer.....57
Section 2.06 Representations and Warranties of the Depositor...............59
Section 2.07 Issuance of Certificates......................................60
Section 2.08 Representations and Warranties of the Seller..................61
Section 2.09 Covenants of the Seller.......................................62
ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND..................63
Section 3.01 Servicer to Act as Servicer...................................63
Section 3.02 Collection of Mortgage Loan Payments..........................65
Section 3.03 Realization Upon Defaulted Mortgage Loans.....................65
Section 3.04 Collection Account and Distribution Account...................66
Section 3.05 Permitted Withdrawals From the Collection Account.............68
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Account.......................................................69
Section 3.07 Permitted Withdrawals From Escrow Account.....................70
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder........................................70
Section 3.09 Transfer of Accounts..........................................71
Section 3.10 Maintenance of Hazard Insurance...............................71
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy...........72
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.................72
Section 3.13 Title, Management and Disposition of REO Property.............73
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements....................................................75
Section 3.15 Notification of Adjustments...................................76
Section 3.16 Optional Purchases of Mortgage Loans by Servicer..............76
Section 3.17 Trustee to Cooperate; Release of Files........................77
Section 3.18 Servicing Compensation........................................78
Section 3.19 Annual Statement as to Compliance.............................78
Section 3.20 Annual Independent Certified Public Accountants' Reports......79
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Section 3.21 Access to Certain Documentation and Information Regarding
the Mortgage Loans............................................79
Section 3.22 Obligations of the Servicer in Respect of Compensating
Interest......................................................79
Section 3.23 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments...........................80
Section 3.24 Obligations of the Servicer in Respect of Credit
Reporting.....................................................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..........................................82
Section 3.29 Periodic Filings..............................................83
ARTICLE IV FLOW OF FUNDS....................................................84
Section 4.01 Interest Distributions........................................84
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.......................................................86
Section 4.03 Allocation of Losses..........................................92
Section 4.04 Method of Distribution........................................92
Section 4.05 Distributions on Book-Entry Certificates......................93
Section 4.06 Statements....................................................93
Section 4.07 Remittance Reports; Advances..................................96
Section 4.08 Basis Risk Reserve Fund.......................................97
ARTICLE V THE CERTIFICATES..................................................99
Section 5.01 The Certificates..............................................99
Section 5.02 Registration of Transfer and Exchange of Certificates........100
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............105
Section 5.04 Persons Deemed Owners........................................105
Section 5.05 Appointment of Paying Agent..................................106
ARTICLE VI THE SELLER, THE SERVICER AND THE DEPOSITOR......................106
Section 6.01 Liability of the Seller, the Servicer and the Depositor......106
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor....106
Section 6.03 Limitation on Liability of the Servicer and Others...........107
Section 6.04 Servicer Not to Resign.......................................107
Section 6.05 Delegation of Duties.........................................108
ARTICLE VII SERVICER EVENTS OF TERMINATION.................................111
Section 7.01 Servicer Events of Termination...............................111
Section 7.02 Trustee to Act; Appointment of Successor.....................113
Section 7.03 Waiver of Defaults...........................................114
Section 7.04 Notification to Certificateholders...........................114
Section 7.05 Survivability of Servicer Liabilities........................114
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ARTICLE VIII THE TRUSTEE...................................................114
Section 8.01 Duties of Trustee............................................114
Section 8.02 Certain Matters Affecting the Trustee........................116
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........117
Section 8.04 Trustee May Own Certificates.................................118
Section 8.05 Seller to Pay Trustee Fees and Expenses......................118
Section 8.06 Eligibility Requirements for Trustee.........................119
Section 8.07 Resignation or Removal of Trustee............................119
Section 8.08 Successor Trustee............................................120
Section 8.09 Merger or Consolidation of Trustee...........................121
Section 8.10 Appointment of Co-Trustee or Separate Trustee................121
Section 8.11 Limitation of Liability......................................122
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.................................................122
Section 8.13 Suits for Enforcement........................................123
Section 8.14 Waiver of Bond Requirement...................................123
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement....123
Section 8.16 Compliance with National Housing Act of 1934.................123
ARTICLE IX REMIC ADMINISTRATION............................................123
Section 9.01 REMIC Administration.........................................123
Section 9.02 Prohibited Transactions and Activities.......................127
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.................................................127
ARTICLE X TERMINATION......................................................128
Section 10.01 Termination..................................................128
Section 10.02 Additional Termination Requirements..........................129
ARTICLE XI MISCELLANEOUS PROVISIONS........................................130
Section 11.01 Amendment....................................................130
Section 11.02 Recordation of Agreement; Counterparts.......................131
Section 11.03 Limitation on Rights of Certificateholders...................132
Section 11.04 Governing Law; Jurisdiction..................................133
Section 11.05 Notices......................................................133
Section 11.06 Severability of Provisions...................................133
Section 11.07 Article and Section References...............................134
Section 11.08 Notice to the Rating Agencies................................134
Section 11.09 Further Assurances...........................................135
Section 11.10 Benefits of Agreement........................................135
Section 11.11 Acts of Certificateholders...................................135
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EXHIBITS
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Exhibit A-1 Form of Class AV-1 Certificates
Exhibit A-2 Form of Class AV-2 Certificates
Exhibit A-3 Form of Class AV-3 Certificates
Exhibit A-4 Form of Class AF-1 Certificates
Exhibit A-5 Form of Class AF-2 Certificates
Exhibit A-6 Form of Class AF-3 Certificates
Exhibit A-7 Form of Class AF-4 Certificates
Exhibit B-1 Form of Class M-1 Certificates
Exhibit B-2 Form of Class M-2 Certificates
Exhibit B-3 Form of Class M-3 Certificates
Exhibit C-1 Form of Class B-1 Certificates
Exhibit C-2 Form of Class B-2 Certificates
Exhibit C-3 Form of Class B-3 Certificates
Exhibit C-4 Form of Class B-4 Certificates
Exhibit C-5 Form of Class B-5 Certificates
Exhibit C-6 Form of Class N Certificates
Exhibit C-7 Form of Class X Certificates
Exhibit C-8 Form of Class XR Certificates
Exhibit C-9 Form of Class R Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J-1 Form of Non-Rule 144A Investment Letter
Exhibit J-2 Form of Rule 144A Investment Letter
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M [Reserved]
Exhibit N [Reserved]
Exhibit O [Reserved]
Exhibit P Monthly Information Provided by Servicer
Exhibit Q Form of Officer's Certificate with Respect to Prepayments
Exhibit R Form of Class AF-1 Confirmation
Exhibit S [Reserved]
Exhibit T [Reserved]
Exhibit U [Reserved]
Exhibit V Form of Certification
Exhibit W Form of Certification to be Provided to the Servicer by the
Trustee
Exhibit X Form of Power of Attorney
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Schedule I Prepayment Charge Schedule
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This Pooling and Servicing Agreement is dated as of January 1,
2005 (the "Agreement"), among BOND SECURITIZATION, L.L.C., 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
nineteen Classes of Certificates, designated as (i) the Class AV-1, Class
AV-2, Class AV-3 Class AF-1, Class AF-2, Class AF-3 and Class AF-4
Certificates, (ii) the Class M-1, Class M-2 and Class M-3 Certificates, (iii)
the Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates,
(iv) the Class N Certificates, (v) the Class X Certificates, (vi) the Class R
Certificates and (vii) the Class XR Certificates.
The Depositor hereby assigns to the Trustee, acting on behalf of
the Certificateholders its interests and rights in the Mortgage Loans. As
provided herein, for federal income tax purposes, the Trustee will elect to
treat the segregated pools of assets subject to this Agreement as nine real
estate mortgage investment conduits (each, a "REMIC"): the Subsidiary REMIC,
the Intermediate REMIC, the Master REMIC, the Class X REMIC and the five Class
B REMICs. The Subsidiary REMIC will consist of (a) all of the assets
constituting the Group 1 Mortgage Loans and all of the assets constituting the
Group 2 Mortgage Loans. The Subsidiary REMIC will issue (1) the REMIC regular
interests (the "Subsidiary REMIC Regular Interests") and (2) the SR Interest.
The Subsidiary REMIC Regular Interests will be uncertificated and will
represent the "regular interests" in the Subsidiary REMIC and the SR Interest
will represent the single class of "residual interest" in the Subsidiary
REMIC.
The Trustee will hold the Subsidiary REMIC Regular Interests for
the benefit of the Intermediate REMIC. The assets of the Intermediate REMIC
will consist of the Subsidiary REMIC Regular Interests and the interests in
the Intermediate REMIC will be evidenced by (i) the Intermediate REMIC Regular
Interests, which will be uncertificated and will represent the "regular
interests" in the Intermediate REMIC and (ii) the IR Interest, which will
represent the single class of "residual interest" in the Intermediate REMIC.
The Trustee will hold the Intermediate REMIC Regular Interests for
the benefit of the Master REMIC. The assets of the Master REMIC will consist
of the Intermediate REMIC Regular Interests and the interests in the Master
REMIC will be evidenced by (i) the Regular Certificates (other than the Class
X and Class B Certificates), the Class XM Interest and the five Class BM
Interests, which will represent the "regular interests" in the Master REMIC
and (ii) the Class MR Interest, which will represent the single class of
"residual interest" in the Master REMIC.
The Trustee will hold the Class XM Interest in the Master REMIC
for the benefit of the Class X REMIC. The assets of the Class X REMIC will
consist of the Class XM Interest in the Master REMIC and interests in the
Class X REMIC will be evidenced by (i) the Class XN
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Interest, which will represent the "regular interests" in the Class X REMIC
and (ii) the Class XR Interest, which will represent the single class of
"residual interest" in the Class X REMIC. As discussed in section 9.01 of the
Agreement, the Class N and Class X Certificates will represent the beneficial
interest in the Class XN Interest.
The Trustee will hold each Class BM Interest in the Master REMIC
for the benefit of a separate Class B REMIC. The assets of each Class B REMIC
will consist of a single Class BM Interest in the Master REMIC and interests
in each Class B REMIC will be evidenced by (i) a separately numbered Class B
Certificate, which will represent the "regular interest" in that Class B REMIC
and (ii) a separately numbered, uncertificated Class BR Interest, which will
represent the single class of "residual interest" in that Class B REMIC.
The Class R Certificates will represent the Class SR, Class IR and
Class MR Interests, and the Class XR Certificates will represent the Class XR
Interests and the residual interest in each of the five Class B REMICs. The
"latest possible maturity date" for federal income tax purposes of all REMICs,
and regular and residual interests created hereunder will be the Latest
Possible Maturity Date.
The Subsidiary REMIC
--------------------
The Subsidiary REMIC Interests, each of which (except for the
Class SR Interests) is hereby designated a REMIC regular interest for federal
income tax purposes, will have the principal balances, pass-through rates and
Corresponding Loan Groups as set forth in the following table:
Pass-Through Corresponding
Subsidiary REMIC Interests Initial Balance Rate Loan Group
---------------------------------- ----------------- --------------- ----------------
A-1 (0.9% of SCB Group 1).... .. (1) (2) 1
B-1 (0.1% of SCB Group 1).... (1) (2) 1
C-1 (Excess of Group 1)...... (1) (2) 1
A-2 (0.9% of SCB Group 2).... .. (1) (2) 2
B-2 (0.1% of SCB Group 2).... (1) (2) 2
C-2 (Excess of Group 2)...... (1) (2) 2
1-$100........................ $100 (3) N/A
SR............................ $0 (4) N/A N/A
---------------
(1) Each Class A Interest will have a principal balance initially equal to
0.9% of the Subordinate Component Balance ("SBC") of its Corresponding
Loan Group. Each Class B Interest will have a principal balance
initially equal to 0.1% of the Subordinate Component Balance of its
Corresponding Loan Group. The initial principal balance of each Class C
Interest will equal the excess of its corresponding Loan Group over the
initial aggregate principal balances of the Class A and Class B
Interests corresponding to such Loan Group.
(2) A Rate equal to the weighted average of the Adjusted Net Mortgage Rates
of the Mortgage Loans of the Corresponding Loan Group.
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(3) The Class 1-$100 Interest does not pay any interest.
(4) The Class SR Interest is the sole class of residual interest in the
Subsidiary REMIC. It has no principal balance and pays no principal or
interest.
On any Distribution Date:
(1) Interest will be payable according to the rates or formulas
described above.
(2) If no Cross-Over Situation exists with respect to any Class of
Interests, then Principal Reductions arising with respect to each Loan Group
will be allocated first to cause the Loan Group's corresponding Class A and
Class B Interests to equal, respectively, 0.9% of the Subordinate Component
Balance ("SCB"), and 0.1% of the SCB as of such Distribution Date, and second
to the Loan Group's corresponding Class C Interest;
(2) If a Cross-Over Situation exists then:
(a) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is less than the Subordinate Cap, Principal Relocation
Payments will be made proportionately to the outstanding Class A Interests
prior to any other Principal Distributions from each such Loan Group; and
(b) if the Calculation Rate in respect of the outstanding Class A and
Class B Interests is greater than the Subordinate Cap, Principal Relocation
Payments will be made proportionately to the outstanding Class B Interests
prior to any other Principal Distributions from each such Loan Group.
In each case, Principal Relocation Payments will be made so as to cause
the Calculation Rate in respect of the outstanding Class A and Class B
Interests to equal the Subordinate Cap. With respect to each Loan Group, if
(and to the extent that) the sum of (a) the principal payments comprising the
Principal Remittance Amount received during the Due Period and (b) the
Realized Losses, are insufficient to make the necessary reductions of
principal on the Class A and Class B Interests, then interest will be added to
the Loan Group's other Interests that are not receiving Principal Relocation
Payments, in proportion to their principal balances.
(c) The outstanding aggregate Class A and Class B Interests will not be
reduced below 1 percent of the excess of (i) the aggregate outstanding
Principal Balances of such Loan Groups as of the end of any Due Period over
(ii) the Certificate Balance of the Senior Certificates related to such Loan
Group as of the related Distribution Date (after taking into account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to any of the Class A and Class B Interests, and if
the Loan Group's Class C Interest has already been reduced to zero, then the
excess principal from that Loan Group will be paid to the Class C Interests of
the other Loan Group if the aggregate Class A and Class B Interests of such
Loan Group are less than one percent of the SCB. Such payment will be made in
proportion to the principal balances of such Class C Interests. If the Loan
Group of the Class C Interest that receives such payment has a Group Cap below
the Group Cap of the Loan Group
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making the payment, then the payment will be treated by Subsidiary REMIC as a
Realized Loss. Conversely, if the Loan Group of the Class C Interest that
receives such payment has a Group Cap above the Group Cap of the Loan Group
making the payment, then the payment will be treated by Subsidiary REMIC as a
reimbursement for prior Realized Losses;
The Intermediate REMIC
----------------------
The following table sets forth Class Designation, the Initial Principal
Balance, the Pass-Through Rate, and the Corresponding Master REMIC Class for
each Intermediate REMIC Regular Interest each of which is hereby designated a
REMIC regular interest for federal income tax purposes:
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Certificate Pass-
Principal Through Allocation of Allocation of
Balance Rate Principal Interest
--------------------------------------------------------------------------------------------------
Class AV-1 $161,180,000.00 (1) Class AV-1 Class AV-1, XM
--------------------------------------------------------------------------------------------------
Class AV-2 $81,247,000.00 (1) Class AV-2 Class AV-2, XM
--------------------------------------------------------------------------------------------------
Class AV-3 $6,373,000.00 (1) Class AV-3 Class AV-3, XM
--------------------------------------------------------------------------------------------------
Class AF-1 $40,230,000.00 (2) Class AF-1 Class AF-1, XM
--------------------------------------------------------------------------------------------------
Class AF-2 $14,120,000.00 (2) Class AF-2 Class AF-2, XM
--------------------------------------------------------------------------------------------------
Class AF-3 $11.533,000.00 (2) Class AF-3 Class AF-3, XM
--------------------------------------------------------------------------------------------------
Class AF-4 $7,320,000.00 (2) Class AF-4 Class AF-4, XM
--------------------------------------------------------------------------------------------------
Class M-1 $26,851,000.00 (3) Class M-1 Class M-1, XM
--------------------------------------------------------------------------------------------------
Class M-2 $20,702,000.00 (3) Class M-2 Class M-2, XM
--------------------------------------------------------------------------------------------------
Class M-3 $6,354,000.00 (3) Class M-3 Class M-3, XM
--------------------------------------------------------------------------------------------------
Class B-1 $5,534,000.00 (3) Class B-1 Class BM-1, XM
--------------------------------------------------------------------------------------------------
Class B-2 $5,124,000.00 (3) Class B-2 Class BM-2, XM
--------------------------------------------------------------------------------------------------
Class B-3 $4,714,000.00 (3) Class B-3 Class BM-3, XM
--------------------------------------------------------------------------------------------------
Class B-4 $5,534,000.00 (3) Class B-4 Class BM-4, XM
--------------------------------------------------------------------------------------------------
Class B-5 $4,099,000.00 (3) Class B-5 Class BM-5, XM
--------------------------------------------------------------------------------------------------
Class1-$100 $100.00 (4) R N/A
--------------------------------------------------------------------------------------------------
Class IR $0 N/A N/A N/A
==================================================================================================
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1) The Group 1 Rate Cap.
2) The Group 2 Rate Cap.
3) The Subordinate Cap.
4) The Class 1-$100 Interest does not pay any interest.
5) The Class IR Interest is the sole class of residual interest in the
Intermediate REMIC. It has no principal balance and pays no principal or
interest.
On any Distribution Date:
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(1) Interest will be payable according to the rates or formulas
described above.
(2) Principal will be payable on each Class of Intermediate REMIC
Intrerest in the same manner that principal is payable on the corresponding
Class or Classes of Certificates.
The Master REMIC
----------------
The following table sets forth characteristics of the
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which such Classes shall be issuable (except that one
Certificate of each Class of Certificates may be issued in a different amount
and, in addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount):
==================================================================================================
Pass- Integral Multiples
Certificate Through Minimum in Excess of
Principal Balance Rate Denomination Minimum
--------------------------------------------------------------------------------------------------
Class 1-AV-1 $161,180,000.00 Floating(1) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 1-AV-2 $81,247,000.00 Floating(2) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 1-AV-3 $6,373,000.00 Floating(3) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 2-AF-1 $40,230,000.00 Fixed (4) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 2-AF-2 $14,120,000.00 Fixed(5) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 2-AF-3 $11.533,000.00 Fixed(6) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class 2-AF-4 $7,320,000.00 Fixed(7) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class M-1 $26,851,000.00 Floating (8) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class M-2 $20,702,000.00 Floating (9) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class M-3 $6,354,000.00 Floating(10) $25,000 $1.00
--------------------------------------------------------------------------------------------------
Class BM-1 $5,534,000.00 Floating(11) N/A N/A
--------------------------------------------------------------------------------------------------
Class BM-2 $5,124,000.00 Floating(12) N/A N/A
--------------------------------------------------------------------------------------------------
Class BM-3 $4,714,000.00 Floating(13) N/A N/A
--------------------------------------------------------------------------------------------------
Class BM-4 $5,534,000.00 Floating(14) N/A N/A
--------------------------------------------------------------------------------------------------
Class BM-5 $4,099,000.00 Floating(15) N/A N/A
--------------------------------------------------------------------------------------------------
Class MR(17) $100.00 N/A $100.00 N/A
--------------------------------------------------------------------------------------------------
Class XM(16) (18) (18) N/A N/A
==================================================================================================
--------------
(1) The lesser of (a) the Class AV-1 Pass-Through Rate and (b) the
Group 1 Rate Cap.
(2) The lesser of (a) the Class AV-2 Pass-Through Rate and (b) the
Group 1 Rate Cap.
(3) The lesser of (a) the Class AV-3 Pass-Through Rate and (b) the
Group 1 Rate Cap.
(4) The lesser of (a) the Class AF-1 Pass-Through Rate and (b) the
Group 2 Rate Cap.
(5) The lesser of (a) the Class AF-2 Pass-Through Rate and (b) the
Group 2 Rate Cap.
(6) The lesser of (a) the Class AF-3 Pass-Through Rate and (b) the
Group 2 Rate Cap.
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(7) The lesser of (a) the Class AF-4 Pass-Through Rate and (b) the Group
2 Rate Cap.
(8) The lesser of (a) the Class M-1 Pass-Through Rate and (b) the Sub
Rate Cap.
(9) The lesser of (a) the Class M-2 Pass-Through Rate and (b) the Sub
Rate Cap.
(10) The lesser of (a) the Class M-3 Pass-Through Rate and (b) the Sub
Rate Cap.
(11) The lesser of (a) the Class B-1 Pass-Through Rate and (b) the Sub
Rate Cap.
(12) The lesser of (a) the Class B-2 Pass-Through Rate and (b) the Sub
Rate Cap.
(13) The lesser of (a) the Class B-3 Pass-Through Rate and (b) the Sub
Rate Cap.
(14) The lesser of (a) the Class B-4 Pass-Through Rate and (b) the Sub
Rate Cap.
(15) The lesser of (a) the Class B-5 Pass-Through Rate and (b) the Sub
Rate Cap.
(16) This regular interest will be uncertificated and held by the
trustee in the manner described below.
(17) The Class SR, IR, and MR Interests are represented by the Class R
Certificates.
(18) As to any Distribution Date, the Class XM Interest will have a
Notional Balance equal to the aggregate Stated Principal Balance of the
Intermediate Regular Interests (excluding the Class 1-$100 Interest) and a
Pass Through Rate equal to the excess of: (i) the weighted average Pass
Through Rate in respect of each such Interest over (i) the weighted average
Pass Through Rate in respect of the Certificates, excluding the Class XR,
Class R, Class X and Class N Certificates. The Class Master X Interest will
also be entitled to all Prepayment Charges.
The Class X REMIC
-----------------
The Class XM Master REMIC Interest will be the sole asset of the
Class X REMIC. The following table sets forth characteristics of the Class XN
Interest and the Class XR Interest, together with the minimum denominations
and integral multiples in excess thereof:
================================================================
Class Certificate Balance Pass-Through Rate
----------------------------------------------------------------
Class XN (1) (1)
----------------------------------------------------------------
Class XR $0 N/A
================================================================
--------------
(1) The Class XN Interest will have a notional balance equal to the
notional balance of the Class XM Master REMIC Interest, and a rate equal to
100% of the Pass Through Rate on the Class XM Master REMIC Interest. The Class
X Certificates and Class N Certificates will represent the beneficial
ownership of the Class XN Interest. As described more fully in section 9.01 of
the Agreement, the Class X Certificates and Class N Certificates when owned by
two
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separate entities will be treated as a partnership for federal income tax
purposes. As described more fully in section 9.01 of the Agreement, (a) the
Class X Certificate will have a notional balance equal to the notional balance
of the Class XN Interest, and a rate equal to 100% of the Pass Through Rate on
the Class XN Interest less the amount payable on the Class N Certificate, and
(b) the Class N Certificates will have an original notional amount equal to
$14,650,000 and a pass through rate of 4.500% per annum.
The Five Class B REMICs
-----------------------
The following table sets forth the characteristics of each Class B REMIC and
the characteristics of its corresponding regular interest and residual
interest.
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Corresponding Designated Regular Designated Residual Corresponding Master
REMIC Interest Interest REMIC Interest
-------------------------------------------------------------------------------------------------------
Class B-1 Class B-1 Certificate Class B-1R Class BM-1
(uncertificated)
-------------------------------------------------------------------------------------------------------
Class B-2 Class B-2 Certificate Class B-2R Class BM-2
(uncertificated)
-------------------------------------------------------------------------------------------------------
Class B-3 Class B-3 Certificate Class B-3R Class BM-3
(uncertificated)
-------------------------------------------------------------------------------------------------------
Class B-4 Class B-4 Certificate Class B-4R Class BM-4
(uncertificated)
-------------------------------------------------------------------------------------------------------
Class B-5 Class B-5 Certificate Class B-5R Class BM-5
(uncertificated)
-------------------------------------------------------------------------------------------------------
Each Designated Regular Interest will represent a REMIC regular interest
in its Corresponding REMIC, will have a principal balance and interest rate
identical to the principal balance and interest rate of its corresponding
Class BM Master REMIC Interest and will have a minimum denomination of $25,000
and additional amounts in $1.00 increments. Each Designated Regular Interest
will be entitled to all amounts payable with respect to its corresponding
Class BM Master REMIC Interest. Each Designated Residual Interest will
represent the sole class of REMIC residual interest in its Corresponding REMIC
and will not be entitled to any amounts payable with respect to its
corresponding Class BM Master REMIC Interest or otherwise.
The following provisions in the Preliminary Statement are intended to
cause net interest and principal collections in respect of the Mortgage Loans
to be distributed from the Subsidiary REMIC to the Intermediate REMIC, from
the Intermediate REMIC to the Master REMIC, from the Master REMIC to each
Class of Certificates (other than the Class B and Class X Certificates) and to
the Class X REMIC and five Class B REMICs, from the Class X REMIC to the Class
XN Interest and from the Class XN Interest to the Class N and Class X
Certificates, respectively and
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from each Class B REMIC to the Class B Certificate that represents the
Designated Regular Interest in that Class B REMIC. The Preliminary Statement
will be interpreted and applied consistently with such intent.
For any purpose for which the pass-through rates is calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the pass-through rates for
each of the interests issued by the Subsidiary REMIC, the Intermediate REMIC,
the Master REMIC and the Class X REMIC, such rates shall be adjusted to equal
a monthly day count convention based on the actual number of days in the
preceding Due Period and a 360-day year so that the Mortgage Loans and all
regular interests will be using the same monthly day counting convention.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article. Unless otherwise specified,
interest on the Floating Rate Certificates will be calculated on the basis of
the actual number of days in the related Interest Accrual Period and a 360-day
year. Interest on the Fixed Rate Certificates and the Class N and Class X
Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": On any date of determination, each
Mortgage Loan with respect to which any portion of a Monthly Payment is, as of
the last day of the related Collection Period, two months or more past due,
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy after the Closing Date.
"Account": Any of the Collection Account, the Distribution
Account and the Basis Risk Reserve Fund.
"Accrued Certificate Interest": With respect to each Distribution
Date and each Class of Offered Certificates and Class B-4, Class B-5 and Class
N Certificates, an amount equal to the interest accrued at the applicable rate
set forth or described opposite such Class in the table in the Preliminary
Statement during the related Interest Accrual Period on the Certificate
Principal Balance or Notional Amount of such Class of Certificates immediately
prior to such Distribution Date, reduced by (except with respect to the Class
N Certificates) such Class' Interest Percentage of Relief Act Interest
Shortfalls for such Distribution Date.
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"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate
at which interest accrues that adjusts based on an Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjusted Net Maximum Mortgage Interest Rate": For each Mortgage
Loan, the applicable Maximum Loan Rate (or the applicable Mortgage Interest
Rate if such Mortgage Loan is a Fixed-Rate Mortgage Loan) less the sum of (i)
the Servicing Fee Rate and (ii) the rate at which the Trustee Fee accrues.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date, on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note.
The first Adjustment Date following the Cut-off Date as to each
Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any 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 6.05(b) hereof.
"Advance Facility Notice": As defined in Section 6.05(c) hereof.
"Advance Financing Person": As defined in Section 6.05(b) hereof.
"Advance Reimbursement Amounts": As defined in Section 6.05(c)
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, and with respect to each VA Loan, the VA Regulations
and the related VA Guaranty.
"Applied Realized Loss Amount": As defined in Section 4.03(a)
hereof.
"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.
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"Assumed Final Maturity Date": As to each Class of Certificates,
the date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due and
collected during the related Collection Period and received by the Trustee one
Business Day prior to the related Distribution Date, (b) any unscheduled
recoveries of principal and interest and Principal Prepayments (excluding
Prepayment Charges), Insurance Proceeds and Liquidation Proceeds in respect of
the Mortgage Loans during the related Prepayment Period and any Subsequent
Recoveries, (c) the aggregate of any Advances made by the Servicer for such
Distribution Date and any Compensating Interest for such Distribution Date,
(d) the Purchase Price for any repurchased Mortgage Loan deposited to the
Collection Account during the related Prepayment Period, (e) any Substitution
Adjustment Amounts deposited in the Collection Account during the related
Prepayment Period, and (f) on the Distribution Date on which the Trust is to
be terminated pursuant to Section 10.01 hereof, the Termination Price, over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant
to Section 3.05, (b) Stayed Funds, (c) the Servicing Fee, and (d) amounts
deposited in the Collection Account or the Distribution Account, as the case
may be, in error.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater
than the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance
of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan
that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Basis Risk Reserve Fund Deposit": With respect to each
Distribution Date, an amount equal to the lesser of: (1) the sum of (a) the
sum of any Net Rate Carryover Amounts for such Distribution Date that remain
unpaid and (b) the Required Basis Risk Reserve Fund Deposit; and (2) any
Monthly Excess Cashflow Amount remaining on such Distribution Date following
the distributions pursuant to Section 4.02(b)(i)-(xxv).
"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 AV-1, Class AV-2, Class AV-3, Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3, Class B-4 and Class B-5 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 New York, the State of Texas or
in the city in which the
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Corporate Trust Office of the Trustee is located are authorized or obligated
by law or executive order to be closed.
"Calculation Rate": For each Distribution Date, in the case of the
Class A and Class B Interests, the product of (i) 10 and (ii) the weighted
average rate of the outstanding Class A and Class B Interests, treating each
Class A Interest as capped at zero or reduced by a fixed percentage of 100% of
the interest accruing on such Class.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class X, Class N and Residual Certificates) and
any Distribution Date, the Original Class Certificate Principal Balance plus
any increases in the Certificate Principal Balance of such Certificate
pursuant to Section 4.03 due to the receipt of Subsequent Recoveries reduced
(but not below zero) by the sum of (i) all amounts actually distributed in
respect of principal of such Class on all prior Distribution Dates and (ii)
with respect to any class of Subordinate Certificates, Applied Realized Loss
Amounts from previous Distribution Dates allocated thereto. The Class X, Class
N and Residual Certificates do not have a Certificate Principal Balance. With
respect to any Certificate (other than a Class X, Class N or a Residual
Certificate) of a Class and any Distribution Date, the portion of the
Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a
Residual Certificate for any purpose hereof.
"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 AF Certificates": The Class AF-1, Class AF-2, Class AF-3
and Class AF-4 Certificates.
"Class AF-4 Principal Distribution Amount": With respect to any
Distribution Date, the product of (x) the percentage equivalent of a fraction,
the numerator of which is (A) the Certificate Principal Balance of the Class
AF-4 Certificates immediately prior to such Distribution Date, and the
denominator of which is (B) the Certificate Principal Balance of the Class AF
Certificates immediately prior to such Distribution Date, (y) the principal
allocable to the Class AF Certificates for such Distribution Date, and (z) the
applicable percentage for the Distribution Date set forth in the following
table.
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Distribution Date Occurring In Percentage
------------------------------ ----------
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February 2005 through January 0%
2008
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February 2008 through January 45%
2010
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February 2010 through January 80%
2011
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February 2011 through January 100%
2012
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February 2012 and thereafter 300%
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"Class AF Pass-Through Rate": For each Distribution Date and each Class
of Class AF Certificates, the lesser of (x) rate set forth in the table below
and (y) and (ii) the applicable Net Rate Cap for such Distribution Date.
Rate On and Prior to the Rate After the
Optional Termination Optional
Class Date Termination Date
-------------------- --------------------------- --------------------
Class AF-1 3.686% 4.186%
Class AF-2 4.090% 4.590%
Class AF-3 4.974% 5.474%
Class AF-4 4.615% 5.115%
"Class AF Principal Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group 2 Principal Remittance Amount for such Distribution
Date, and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
"Class AF 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 product of (1) the Class AF Principal Allocation Percentage and
(2) the excess of (x) the Certificate Principal Balance of the Senior
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) approximately 57.10% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the excess of the Pool
Balance as of the last day of the related Collection Period over the product
of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class AV Certificates": The Class AV-1, Class AV-2 and Class AV-3
Certificates.
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"Class AV Principal Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (x) the Group 1 Principal Remittance Amount for such Distribution
Date, and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
"Class AV 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 product of (1) the Class AV Principal Allocation Percentage and
(2) the excess of (x) the Certificate Principal Balance of the Senior
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) approximately 57.10% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the excess of the Pool
Balance as of the last day of the related Collection Period over the product
of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class AV-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.120% per annum, and (ii)
following the Optional Termination Date, 0.240% per annum.
"Class AV-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class AV-1 Certificate Margin for such
Distribution Date and (y) the applicable Net Rate Cap for such Distribution
Date.
"Class AV-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.220% per annum, and (ii)
following the Optional Termination Date, 0.440% per annum.
"Class AV-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class AV-2 Certificate Margin for such
Distribution Date and (y) the applicable Net Rate Cap for such Distribution
Date.
"Class AV-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.340% per annum, and (ii)
following the Optional Termination Date, 0.680% per annum.
"Class AV-3 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class AV-3 Certificate Margin for such
Distribution Date and (y) the applicable Net Rate Cap for such Distribution
Date..
"Class B Certificate": Any one of the Certificates with an "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, Exhibit C-2, Exhibit C-3, Exhibit C-4 and Exhibit C-5, executed
by the Trustee on behalf of the Trust and authenticated and delivered by the
Certificate Registrar, representing the right to distributions as set forth
herein and therein.
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"Class B-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.30% per annum, and (ii) following
the Optional Termination Date, 1.950% per annum.
"Class B-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class B-1 Certificate Margin for such
Distribution Date and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account the payment of the Class
M-3 Principal Distribution Amount on such Distribution Date) and (v) the
Certificate Principal Balances of the B-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i)
approximately 86.10% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the excess of the Pool Balance as of the
last day of the related Collection Period over the product of (i) 0.50% and
(ii) the Pool Balance on the Cut-off Date.
"Class B-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.40% per annum, and (ii) following
the Optional Termination Date, 2.10% per annum.
"Class B-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) sum of (i) LIBOR as of the related LIBOR
Determination Date and (ii) the Class B-2 Certificate Margin for such
Distribution Date and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account the payment of the Class
M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date) and (vi) the Certificate Principal Balances of the B-2
Certificates immediately prior to such Distribution Date over (y) the lesser
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of (A) the product of (i) approximately 88.60% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the excess of the Pool
Balance as of the last day of the related Collection Period over the product
of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class B-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 2.300% per annum, and (ii)
following the Optional Termination Date, 3.450% per annum.
"Class B-3 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) sum of (i) LIBOR as of the related LIBOR
Determination Date and (ii) the Class B-3 Certificate Margin for such
Distribution Date and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account the payment of the Class
M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class B-2
Certificates (after taking into account the payment of the Class B-2 Principal
Distribution Amount on such Distribution Date) and (vii) the Certificate
Principal Balances of the B-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) approximately
90.90% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the excess of the Pool Balance as of the last day of the
related Collection Period over the product of (i) 0.50% and (ii) the Pool
Balance on the Cut-off Date.
"Class B-4 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) 6.000% and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account the payment of the Class
M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance
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of the Class B-2 Certificates (after taking into account the payment of the
Class B-2 Principal Distribution Amount on such Distribution Date), (vii) the
Certificate Principal Balance of the Class B-3 Certificates (after taking into
account the payment of the Class B-3 Principal Distribution Amount on such
Distribution Date) and (viii) the Certificate Principal Balances of the B-4
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) approximately 93.60% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the excess of the Pool
Balance as of the last day of the related Collection Period over the product
of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class B-5 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) 6.000% and (y) the applicable Net Rate
Cap for such Distribution Date.
"Class B-5 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account the payment of the Class
M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class B-1 Certificates (after taking into
account the payment of the Class B-1 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class B-2
Certificates (after taking into account the payment of the Class B-2 Principal
Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class B-3 Certificates (after taking into account the
payment of the Class B-3 Principal Distribution Amount on such Distribution
Date), (viii) the Certificate Principal Balance of the Class B-4 Certificates
(after taking into account the payment of the Class B-4 Principal Distribution
Amount on such Distribution Date) and (ix) the Certificate Principal Balances
of the B-5 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) approximately 95.60% and (ii) the Pool
Balance as of the last day of the related Collection Period and (B) the excess
of the Pool Balance as of the last day of the related Collection Period over
the product of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class M Certificate": Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx, X-0 and Exhibit B-3, executed by the Trustee on behalf
of the Trust and authenticated and delivered by the Certificate Registrar,
representing the right to distributions as set forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the
Class M Certificates.
"Class M-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.480% per annum, and (ii)
following the Optional Termination Date, 0.720% per annum.
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"Class M-1 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class M-1 Certificate Margin for such
Distribution Date and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i)
approximately 70.20% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the excess of the Pool Balance as of the
last day of the related Collection Period over the product of (i) 0.50% and
(ii) the Pool Balance on the Cut-off Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.730% per annum, and (ii)
following the Optional Termination Date, 1.095% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of the (x) the sum of (i) LIBOR as of the
related LIBOR Determination Date and (ii) the Class M-2 Certificate Margin for
such Distribution Date and (y) the applicable Net 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 Certificate Principal Balance of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balances of the M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) approximately 80.30% and (ii) the Pool Balance as of the last
day of the related Collection Period and (B) the excess of the Pool Balance as
of the last day of the related Collection Period over the product of (i) 0.50%
and (ii) the Pool Balance on the Cut-off Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.830% per annum, and (ii)
following the Optional Termination Date, 1.245% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, a per
annum rate equal to the lesser of (x) the sum of (i) LIBOR as of the related
LIBOR Determination Date and (ii) the Class M-3 Certificate Margin for such
Distribution Date and (y) the applicable Net 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
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of (i) the Certificate Principal Balance of the Senior Certificates (after
taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), (iii) the
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (iv) the Certificate Principal Balances of the M-3
Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) approximately 83.40% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the excess of the Pool
Balance as of the last day of the related Collection Period over the product
of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class N Certificate": Any one of the Certificates with an "N"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-6, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class R Certificate": Any one of the Class R and Class XR
Certificates.
"Class R Certificate": Any one of the Certificates with an "R"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-9, 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 XR Certificate": Any one of the Certificates with an "XR"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-8, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class X Certificate": Any one of the Certificates with an "X"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-7, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class X Distributable Amount": With respect to any Distribution
Date, the excess of (i) the aggregate of amounts distributable on the Class X
Interest for such Distribution Date as provided in the Preliminary Statement,
over (ii) the aggregate of amounts distributable to the Class N Certificates
pursuant to Section 4.02(b).
"Class X Interest": As defined in the Preliminary Statement.
"Closing Date": February 8, 2005.
"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
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Servicing LP, as Servicer for the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB1," 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 or loans, and the denominator of which is the
Value of the related Mortgaged Property.
"Compensating Interest": As defined in Section 3.22 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 or VA Loan.
"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, C-BASS 2005-CB1, 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.
"Cross-Over Situation": For any Distribution Date and for each
Loan Group (after taking into account principal distributions on such
Distribution Date) with respect to the Class A Interest and Class B Interests,
the Class A and Class B Interests corresponding to any Loan Group are in the
aggregate less than 1% of the Subordinate Component Balance of the Loan Group
to which they correspond.
"Custodial Agreement": The Custodial Agreement, dated as of
January 1, 2005, 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": January 1, 2005.
"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).
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"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.
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court
of competent jurisdiction in a proceeding under the Bankruptcy Code, except
such a reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding principal balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan, 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": Bond Securitization, L.L.C., a Delaware limited
liability company, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as
a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date, the
10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding
such 10th day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust other than
through an Independent Contractor; provided, however, that the Trustee (nor
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the Servicer under this Agreement) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Servicer under this
Agreement) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disproportionate Holder": As defined in Section 9.01(n) hereof.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any possession of
the United States, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, (ii) any organization
(other than a cooperative described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code unless such organization
is subject to the tax imposed by Section 511 of the Code, (iii) any
organization described in Section 1381(a)(2)(C) of the Code, or (iv) any other
Person so designated by the Trustee based upon an Opinion of Counsel provided
by nationally recognized counsel to the Trustee that the holding of an
ownership interest in a Residual Certificate by such Person may cause the
Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the
transfer of an ownership interest in a Residual Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof if all of its activities are
subject to tax and a majority of its board of directors is not selected by a
governmental unit. The term "United States," "state" and "international
organization" shall have the meanings set forth in Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, U.S. Bank National Association, as Trustee, in trust
for the registered Holders of 2005-CB1 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB1" and which must be an Eligible
Account.
"Distribution Date": The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following
such 25th day, commencing on February 25, 2005.
"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
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.
"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
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obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated in one of the
top three rating categories by each of the Rating Agencies at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits
in which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured
such that, as evidenced by an Opinion of Counsel delivered to the Trustee and
to each Rating Agency, the Certificateholders will have a claim with respect
to the funds in such account or a perfected first priority security interest
against such collateral (which shall be limited to Permitted Investments)
securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained,
(iii) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution, national banking
association or trust company acting in its fiduciary capacity or (iv) an
account otherwise acceptable to each Rating Agency without reduction or
withdrawal of their then current ratings of the Certificates as evidenced by a
letter from each Rating Agency to the Trustee. Eligible Accounts may bear
interest.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted
for a Defective Mortgage Loan pursuant to the terms of this Agreement which
must, on the date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal and interest
due during or prior to the month of substitution, not in excess of, and not
more than 5% less than, the outstanding principal balance of the Defective
Mortgage Loan as of the Due Date in the calendar month during which the
substitution occurs, (ii) have a Mortgage Interest Rate, with respect to a
Fixed-Rate Mortgage Loan, not less than the Mortgage Interest Rate of the
Defective Mortgage Loan and not more than 1% in excess of the Mortgage
Interest Rate of such Defective Mortgage Loan, (iii) if an Adjustable-Rate
Mortgage Loan, have a Maximum Loan Rate not less than the Maximum Loan Rate
for the Defective Mortgage Loan, (iv) if an Adjustable-Rate Mortgage Loan,
have a Minimum Loan Rate not less than the Minimum Loan Rate of the Defective
Mortgage Loan, (v) if an Adjustable-Rate Mortgage Loan, have a Gross Margin
equal to or greater than the Gross Margin of the Defective Mortgage Loan, (vi)
have the same Due Date as the Defective Mortgage Loan; (vii) if an
Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Defective Mortgage Loan, an
Eligible Substitute Mortgage Loan must have all Adjustment Dates occurring
during the same Interest Accrual Period during which Adjustment Dates occur
with respect to the substituted Mortgage Loan, (viii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Defective Mortgage Loan, (ix) be current as of the date of substitution, (x)
have a Combined Loan-to-Value Ratio as of the date of substitution equal to or
lower than the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as
of such date, (xi) have a risk grading determined by the Seller at least equal
to the risk grading assigned on the Defective Mortgage Loan, (xii) have been
reunderwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Defective Mortgage Loan, and (xiii) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Defective Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Defective Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Interest Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Interest Rates, the risk
gradings described in clause (xi) hereof shall
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be satisfied as to each such mortgage loan, the terms described in clause
(viii) hereof shall be determined on the basis of weighted average remaining
term to maturity, the Combined Loan-to-Value Ratios described in clause (x)
hereof shall be satisfied as to each such mortgage loan and, except to the
extent otherwise provided in this sentence, the representations and warranties
described in clause (xiii) hereof must be satisfied as to each Eligible
Substitute Mortgage Loan or in the aggregate, as the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificate": Any of the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class N,
Class X, Class XR and Class R Certificates, and any Certificates of any other
Class that has ceased to satisfy the requirements of Prohibited Transaction
Exemption 2002-41, 67 Fed. Reg. 54487 (August 22, 2002), or any substantially
similar exemption.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Expense Fee Rate": With respect to each Mortgage Loan and any
Distribution Date, the sum of (i) the Trustee Fee Rate and (ii) the Servicing
Fee Rate.
"Extended Period": As defined in Section 9.04(b).
"Extra Principal Distribution Amount": As of any Distribution
Date, the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date and (y) the Overcollateralization Deficiency for such
Distribution Date.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration, an agency within HUD.
"FHA Approved Mortgagee": Those institutions which are approved
by FHA to act as servicer and mortgagee of record pursuant to FHA Regulations.
"FHA Insurance Contract" or "FHA Insurance": The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
"FHA Loan": A Mortgage Loan which is the subject of an FHA
Insurance Contract as evidenced by a Mortgage Insurance Certificate.
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"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, Inc. and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the Securities and Exchange Commission.
"Fixed Rate Certificates": The Class AF Certificates and the
Class B-4 and Class B-5 Certificates.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Floating Rate Certificates": The Class AV Certificates and the
Subordinate Certificates (other than the Class B-4 and Class B-5
Certificates).
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Gross Margin": With respect to each Adjustable-Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is
added to the Index on each Adjustment Date in accordance with the terms of the
related Mortgage Note used to determine the Mortgage Interest Rate for such
Mortgage Loan.
"Group 1 Balance": With respect to any Distribution Date, the
aggregate Principal Balance of the Group 1 Mortgage Loans.
"Group 1 Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group 1
Mortgage Loans or to Compensating Interest paid by the Servicer with respect
to the Group 1 Mortgage Loans.
"Group 1 Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group 1 Principal Remittance Amount
for such Distribution Date minus (y) the amount of any Overcollateralization
Release Amount for such Distribution Date multiplied
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by the Class AV Principal Allocation Percentage for such Distribution Date,
and (ii) the Extra Principal Distribution Amount for such Distribution Date
multiplied by the Class AV Principal Allocation Percentage for such
Distribution Date.
"Group 1 Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each payment of principal on a Group 1 Mortgage Loan due during the
related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto, (ii) all
full and partial Principal Prepayments received by the Servicer on the Group 1
Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation
Proceeds allocable to principal actually collected by the Servicer on the
Group 1 Mortgage Loans during the related Prepayment Period, (iv) with respect
to Defective Mortgage Loans that are Group 1 Mortgage Loans repurchased with
respect to such Prepayment Period, the portion of the Purchase Price allocable
to principal, (v) any Substitution Adjustment Amounts received with respect to
Group 1 Mortgage Loans on or prior to the previous Determination Date and not
yet distributed and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal on the Group 1 Mortgage Loans.
"Group 1 Rate Cap": With respect to the Class AV Certificates and
any Distribution Date is the lesser of (i) the Group Cap for Loan Group 1 for
such Distribution Date and (ii) the Maximum Cap for Loan Group 1 for such
Distribution Date.
"Group 1 Share": (i) Generally, as of any Distribution Date, a
fraction whose numerator is the aggregate Stated Principal Balance of the
Group 1 Mortgage Loans (as of the first day of the related Collection Period)
and whose denominator is the aggregate Stated Principal Balance of the
Mortgage Loans (as of the first day of the related Collection Period).
(ii) Notwithstanding the above, if the sum of (a) the Certificate
Principal Balance of the Class AV Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share), and (b) the Group 1
Share multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) exceeds the aggregate Stated Principal Balance of the Group 1
Mortgage Loans as of the last day of the related Collection Period, the Group
1 Share will be reduced (and as described in paragraph (iii) of the definition
of Group 2 Share and Group 3 Share, the Group 2 Share and Group 3 Share,
respectively, will be increased) by a fraction equal to the amount of such
excess divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Collection Period.
(iii) Furthermore, if the sum of (x) the Certificate Principal
Balance of the Class AF Certificates for such Distribution Date (prior to any
actual distributions on such Distribution Date but assuming that distributions
are made in accordance with each Group Share as determined in paragraph (i) of
the definition of such Group Share) and (y) the Group 2 Share
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multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share) exceeds the aggregate Stated Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection Period, the Group
1 Share will be increased by a fraction equal to the amount of such excess
divided by the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Collection Period. An increase resulting from this
paragraph (iii) will be allocated proportionately to the Group 1 Share and
Group 2 Share based on their relative values. Notwithstanding the preceding
sentence, the amount increased in this paragraph (iii) will be subject to a
reduction under paragraph (ii) of this definition.
(iv) On any Distribution Date, the sum of the Group 1 Share and
Group 2 Share for such Distribution Date shall equal 1.00.
"Group 2 Balance": With respect to any Distribution Date, the
aggregate Principal Balance of the Group 2 Mortgage Loans.
"Group 2 Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group 2
Mortgage Loans or to Compensating Interest paid by the Servicer with respect
to the Group 2 Mortgage Loans.
"Group 2 Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) (x) the Group 2 Principal Remittance Amount
for such Distribution Date minus (y) the amount of any Overcollateralization
Release Amount for such Distribution Date multiplied by the Class AF Principal
Allocation Percentage for such Distribution Date, and (ii) the Extra Principal
Distribution Amount for such Distribution Date multiplied by the Class AF
Principal Allocation Percentage for such Distribution Date.
"Group 2 Principal Remittance Amount": With respect to any
Distribution Date, to the extent of funds available therefor, the sum (less
amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03)
of: (i) each payment of principal on a Group 2 Mortgage Loan due during the
related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto, (ii) all
full and partial Principal Prepayments received by the Servicer on the Group 2
Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation
Proceeds allocable to principal actually collected by the Servicer on the
Group 2 Mortgage Loans during the related Prepayment Period, (iv) with respect
to Defective Mortgage Loans that are Group 2 Mortgage Loans repurchased with
respect to such Prepayment Period, the portion of the Purchase Price allocable
to principal, (v) any Substitution Adjustment Amounts received with respect to
Group 2 Mortgage Loans on or prior to the previous Determination Date and not
yet distributed and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal on the Group 2 Mortgage Loans.
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"Group 2 Rate Cap": With respect to the Class AF Certificates and
any Distribution Date is the lesser of (i) the Group Cap for Loan Group 2 for
such Distribution Date and (ii) the Maximum Cap for Loan Group 2 for such
Distribution Date.
"Group 2 Share": (i) Generally, as of any Distribution Date, a
fraction whose numerator is the aggregate Stated Principal Balance of the
Group 2 Mortgage Loans (as of the first day of the related Collection Period)
and whose denominator is the aggregate Stated Principal Balance of the
Mortgage Loans (as of the first day of the related Collection Period).
(ii) Notwithstanding the above, if the sum of (a) the Certificate
Principal Balance of the Class AF Certificates for such Distribution Date
(prior to any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share), and (b) the Group 2
Share multiplied by the Certificate Principal Balance of the Subordinate
Certificates for such Distribution Date (prior to any actual distributions on
such Distribution Date but assuming that distributions are made in accordance
with each Group Share as determined in paragraph (i) of the definition of such
Group Share), exceeds the aggregate Stated Principal Balance of the Group 2
Mortgage Loans as of the last day of the related Collection Period, the Group
2 Share will be reduced (and as described in paragraph (iii) of the definition
of Group 1 Share, the Group 1 Share will be increased) by a fraction equal to
the amount of such excess divided by the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Collection Period.
(iii) Furthermore, if the sum of (x) the Certificate Principal
Balance of the Class AF Certificates for such Distribution Date (prior to any
actual distributions on such Distribution Date but assuming that distributions
are made in accordance with each Group Share as determined in paragraph (i) of
the definition of such Group Share) and (y) the Group 2 Share as of the last
day of the related Collection Period multiplied by the Certificate Principal
Balance of the Subordinate Certificates for such Distribution Date (prior to
any actual distributions on such Distribution Date but assuming that
distributions are made in accordance with each Group Share as determined in
paragraph (i) of the definition of such Group Share) exceeds the aggregate
Stated Principal Balance of the Group 2 Mortgage Loans as of the last day of
the related Collection Period, the Group 1 Share will be increased by a
fraction equal to the amount of such excess divided by the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related
Collection Period. An increase resulting from this paragraph (iii) will be
allocated proportionately to the Group 2 Share and Group 1 Share based on
their relative values. Notwithstanding the preceding sentence, the amount
increased in this paragraph (iii) will be subject to a reduction under
paragraph (ii) of this definition.
(iv) On any Distribution Date, the sum of the Group 1 Share and
Group 2 Share. for such Distribution Date shall equal 1.00.
"Group Balance": With respect to Loan Group 1 and Loan Group 2,
the Group 1 Balance and the Group 2 Balance, respectively.
"Group Cap": With respect to any Loan Group and Distribution Date,
a per annum rate equal to the weighted average Net Mortgage Interest Rate for
the Mortgage Loans in
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such Loan Group (weighted on the basis of the principal balances of the
related Mortgage Loans as of the first day of the related Collection Period);
such result to be adjusted as necessary to an effective rate reflecting the
accrual of interest on an actual/360 basis with respect to the Class AV
Certificates and on a 30/360 basis with respect to the Class AF Certificates.
"Group Share": Any of the Group 1 Share or Group 2 Share, as
applicable.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Servicer and
their respective Affiliates, (ii) does not have any direct financial interest
in or any material indirect financial interest in the Depositor or the
Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor or the Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; provided, however, that a Person shall not fail to be Independent
of the Depositor or the Servicer or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any Class of securities issued
by the Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Certificates), so
long as the Trust Fund does not receive or derive any income from such Person
and provided that the relationship between such Person and the Trust Fund is
at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the
Trustee has received an Opinion of Counsel, which Opinion of Counsel shall be
an expense of the Trust Fund, to the effect that the taking of any action in
respect of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code), or cause any income realized in respect of such REO
Property to fail to qualify as Rents from Real Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and
with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate other than a Class 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.
"Initial Overcollateralization Amount": $9,018,390.62.
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"Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date
and (i) with respect to the Floating Rate Certificates, the period from the
preceding Distribution Date to the day prior to the current Distribution Date
(or, in the case of the first Distribution Date, the period from the Closing
Date through February 25, 2005), and (ii) with respect to (x) the Fixed Rate
Certificates and the Class N and Class X Certificates, the calendar month
immediately preceding the month in which such Distribution Date occurs.
"Interest Carry Forward Amount": With respect to any Class of
Offered Certificates and the Class B-4 and Class B-5 Certificates and any
Distribution Date, the sum of (a) the excess, if any, of the Accrued
Certificate Interest and any Interest Carry Forward Amount for the prior
Distribution Date, over the amount in respect of interest actually distributed
on such Class on such prior Distribution Date and (b) (1) with respect to the
Floating Rate Certificates, interest on such excess at the applicable
Pass-Through Rate for the actual number of days elapsed on the basis of a
360-day year since the prior Distribution Date, and (2) with respect to the
Fixed Rate Certificates, 30 days' interest on such excess at the applicable
Pass-Through Rate on the basis of a 360-day year consisting of twelve 30-day
months.
"Interest Percentage": With respect to any Class of Certificates
and any Distribution Date, the ratio (expressed as a decimal carried to six
places) of the Accrued Certificate Interest for such Class to the sum of the
Accrued Certificate Interest for all classes in each case with respect to such
Distribution Date and without taking into account any Relief Act Interest
Shortfalls for such Distribution Date.
"Intermediate REMIC Regular Interest": As defined in the
Preliminary Statement.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any
related Collection Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to
any acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such Collection Period and not
previously recovered.
"Lender": As defined in Section 6.05(b) hereof.
"LIBOR": With respect to each Interest Accrual Period, the rate
determined by the Trustee on the related LIBOR Determination Date on the basis
of the offered rate for one-month United States dollar deposits, as such rate
appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date. If no such quotations are available on an LIBOR
Determination Date, LIBOR for the related Interest Accrual Period will be
established by the Trustee as follows:
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(i) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of the rates quoted by one
or more major banks in New York City, selected by the Trustee after
consultation with the Depositor, as of 11:00 A.M., New York City time,
on such date for loans in U.S. Dollars to leading European banks for a
period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Offered Certificates and the Class
B-4 and Class B-5 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 Determination Date": With respect to the Floating Rate
Certificates, (i) for the first Distribution Date, the second LIBOR Business
Day preceding the Closing Date and (ii) for each subsequent Distribution Date,
the second LIBOR Business Day prior to the immediately preceding Distribution
Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds and Insurance Proceeds which
it expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Fund by reason of its being purchased,
sold or replaced pursuant to or as contemplated by Section 2.03 or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or
purchased pursuant to Section 3.13 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received
by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation
or (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise.
"Liquidation Report": As to any Distribution Date, the report with
respect to any Liquidated Mortgage Loans for such Distribution Date in such
form and containing such information as is agreed to by the Servicer and the
Trustee.
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"Loan Group": Any of Loan Group 1 or Loan Group 2, as applicable.
"Loan Guaranty Certificate": The certificate evidencing a VA
Guaranty.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and
has not been replaced, an affidavit from the Seller certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a
copy of the related Mortgage Note and indemnifying the Trust against any loss,
cost or liability resulting from the failure to deliver the original Mortgage
Note) in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Master REMIC Regular Interest": As defined in the Preliminary
Statement.
"Maximum Cap": With respect to (i) any Loan Group, the Senior
Certificates and any Distribution Date will be a per annum rate equal to the
weighted average Adjusted Net Maximum Mortgage Interest Rate for the Mortgage
Loans in such Loan Group (weighted on the basis of the principal balances of
the related Mortgage Loans as of the first day of the related Collection
Period); such result to be adjusted as necessary to an effective rate
reflecting the accrual of interest on an actual/360 basis with respect to the
Class AV Certificates and on a 30/360 basis with respect to the Class AF
Certificates, and (ii) the Subordinate Certificates and any Distribution Date
will equal the weighted average of the Maximum Caps (each adjusted as
necessary to an effective rate reflecting the accrual of interest on an
actual/360 basis) for Loan Group 1 and Loan Group 2 and such Distribution Date
(weighted on the basis of the excess of the Group Balance of each such Loan
Group as of the first day of the related Collection Period over the
Certificate Principal Balance of the Senior Certificates related to such Loan
Group on such Distribution Date (prior to all distributions to be made on such
Distribution Date)).
"Maximum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the maximum
Mortgage Interest Rate thereunder.
"Minimum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, the percentage set forth in the related Mortgage Note as the minimum
Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": With respect to each
Distribution Date, the sum of the Monthly Excess Interest Amount for such
Distribution Date, the Overcollateralization Release Amount for such
Distribution Date and (without duplication) any portion of the Principal
Distribution Amount remaining after all distributions have been made pursuant
to Section 4.02(a) hereof on such Distribution Date.
"Monthly Excess Interest Amount": With respect to each
Distribution Date, the amount, if any, by which the Group 1 Interest
Remittance Amount and Group 2 Interest
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Remittance Amount for such Distribution Date exceed the aggregate amount
distributed on such Distribution Date pursuant to paragraphs (a) through (c)
under Section 4.01 hereof.
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan
which is payable by the related Mortgagor from time to time under the related
Mortgage Note, determined: (a) after giving effect to (i) any Deficient
Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and
(ii) any reduction in the amount of interest collectible from the related
Mortgagor pursuant to the Relief Act; (b) without giving effect to any
extension granted or agreed to by the Servicer pursuant to Section 3.01; and
(c) on the assumption that all other amounts, if any, due under such Mortgage
Loan are paid when due.
"Moody's": 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.
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"Mortgage Loan": Each mortgage loan transferred and assigned to
the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time
held as a part of the Trust Fund, the Mortgage Loans so held being identified
in the Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, dated as of February 8, 2005, regarding the transfer
of the Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date (i) with respect to the
Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed-Rate Mortgage Loans and the
Adjustable-Rate Mortgage Loans, attached hereto as Exhibit D. The Mortgage
Loan Schedule shall be prepared by the Seller and shall set forth the
following information with respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged
Property or a designation that the Mortgaged Property is a multi-family
property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off
Date;
(12) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the current principal and interest payment of the Mortgage Loan
as of the Cut-off Date;
(14) the contractual interest paid to date of the Mortgage Loan;
(15) if the Mortgage Loan is not owner-financed, the Combined
Loan-to-Value Ratio at origination;
(16) a code indicating the loan performance status of the Mortgage
Loan as of the Cut-off Date;
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(17) a code indicating whether the Mortgaged Property is in bankruptcy
or in its forbearance period as of the Cut-off Date;
(18) a code indicating whether the Mortgage Loan is conventional or
insured by the FHA;
(19) a code indicating the Index that is associated with such Mortgage
Loan;
(20) the Gross Margin;
(21) the Periodic Rate Cap;
(22) the Minimum Loan Rate;
(23) the Maximum Loan Rate;
(24) a code indicating whether the Mortgage Loan has a Prepayment
Charge and the type of Prepayment Penalty;
(25) the first Adjustment Date immediately following the Cut-off Date;
(26) the rate adjustment frequency;
(27) the payment adjustment frequency;
(28) a code indicating whether the Mortgage Loan is owner-financed;
(29) a code indicating whether the Mortgage Loan is subject to
negative amortization;
(30) a code indicating whether the Mortgage Loan is a second lien;
(31) a code indicating whether the Mortgage Xxxxx is a fixed-rate or
adjustable rate Mortgage Loan; and
(32) the Mortgage Identification Number for Mortgage Loans registered with
MERS.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate, for the Fixed-Rate Mortgage Loans and for the Adjustable-Rate
Mortgage Loans: (1) the number of Mortgage Loans; (2) the current Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage
Loans. The Mortgage Loan Schedule shall be amended from time to time by the
Seller in accordance with the provisions of this Agreement. With respect to
any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related
Cut-off Date for such Mortgage Loan, determined in accordance with the
definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
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"Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect
thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling or multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Excess Spread": With respect to any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the excess of (x) the Pool Balance as of the last day of the
related Collection Period, multiplied by 1/12th of the Weighted Average Net
Mortgage Rate over (y) the sum of Accrued Certificate Interest for the Offered
Certificates and the Class B-4 and Class B-5 Certificates for such
Distribution Date, and (ii) 12, and the denominator of which is the Pool
Balance as of the last day of the related Collection Period.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property
(including REO Property) the related Liquidation Proceeds net of unreimbursed
Advances, unreimbursed Servicing Advances, Servicing Fees and any other
accrued and unpaid servicing fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan
and any Collection Period, the Mortgage Interest Rate borne by such Mortgage
Loan minus the Expense Fee Rate for such Mortgage Loan and such Collection
Period.
"Net Rate Cap": With respect to the Class AV and Class AF
Certificates and any Distribution Date, the Group Rate Cap for Loan Group 1
and Loan Group 2, respectively, and such Distribution Date. With respect to
each class of Subordinate Certificates and any Distribution Date, the Sub Rate
Cap for such Distribution Date.
"Net Rate Carryover Amount": If on any Distribution Date, the
Accrued Certificate Interest for any of the Class AV or the Subordinate
Certificates is based upon the applicable Net Rate Cap, the excess of (i) the
amount of interest such Certificate would have been entitled to receive on
such Distribution Date based on its Pass-Through Rate, over (ii) the amount of
interest such Certificate received on such Distribution Date based on the
applicable Net Rate Cap, together with the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate on such Certificate).
"New Lease": Any lease of REO Property entered into on behalf of
the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer, will not or, in the case of
a proposed Advance or Servicing Advance,
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would not be ultimately recoverable from Late Collections on such Mortgage
Loan as provided herein.
"Notional Amount": 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)(xxi).
"Offered Certificates": The Class AV-1, Class AV-2, Class AV-3,
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 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) may opt to terminate the Mortgage Pool
pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to
each Class of Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class in the Preliminary Statement,
except with respect to the Class N, Class X and Residual Certificates, which
have an Original Class Certificate Principal Balance of zero.
"Original Class N Notional Amount": $14,650,000.
"Overcollateralization Amount": As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the immediately
preceding Collection Period over (y) the aggregate Certificate Principal
Balances of all Classes of Offered Certificates and the Class B-4 and Class
B-5 Certificates (after taking into account all distributions of principal on
such Distribution Date).
"Overcollateralization Deficiency": As of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balance of
all Classes of Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the excess, if any, of (i) the
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Overcollateralization Amount for such Distribution Date, assuming that 100% of
the Principal Remittance Amount is applied as a principal payment on the
Offered Certificates and the Class B-4 and Class B-5 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 AV-1 Pass-Through Rate, the
Class AV-2 Pass-Through Rate, the Class AV-3 Pass-Through Rate, the Class AF-1
Pass-Through Rate, the Class AF-2 Pass-Through Rate, the Class AF-3
Pass-Through Rate, the Class AF-4 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, the Class B-4 Pass-Through Rate and the Class B-5
Pass-Through Rate. With respect to the Class N Certificates, the Pass-Through
Rate is 4.500% 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 or 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.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued or managed by the Depositor, the Servicer,
the Trustee or any of their respective Affiliates or for which an Affiliate of
the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agents acting
in its commercial capacity)
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incorporated under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal and/or
state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating
categories of S&P and Xxxxx'x and the highest available rating category
of Fitch and DBRS and provided that each such investment has an original
maturity of no more than 365 days and (B) any other demand or time
deposit or deposit which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A or higher by S&P and Fitch and rated A2 or higher by
Xxxxx'x, provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market prices plus accrued
interest or (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the 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
(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.
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"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 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 Charge Schedule": As of the Cut-off Date, a list
attached hereto as Schedule I (including the Prepayment Charge summary
attached thereto), setting forth the following information with respect to
each prepayment penalty:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of the
Cut-off Date.
The Prepayment Charge Schedule shall be amended from time to time
by the Servicer in accordance with the provisions of this Agreement and a copy
of each related amendment shall be furnished by the Servicer to the Trustee
and the Class N and Class X Certificateholders.
"Prepayment 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.
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"Primary Insurance Policy": Each policy of primary guaranty
mortgage insurance issued by a Qualified Insurer in effect with respect to any
Mortgage Loan, or any replacement policy therefor obtained by the Servicer
pursuant to Section 3.08.
"Principal Balance": As to any Mortgage Loan and any day, other
than a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance,
minus all collections credited against the principal balance of any such
Mortgage Loan and the principal portion of Advances plus, Deferred Interest,
if any. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any
day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date, the
sum of (i) the Principal Remittance Amount minus, for Distribution Dates
occurring on and after the Stepdown Date and for which a Trigger Event is not
in effect, the Overcollateralization Release Amount, if any, and (ii) the
Extra Principal Distribution Amount, if any.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the
full amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Principal Relocation Payment": A payment from any Loan Group to a
REMIC 1 Regular Interest other than a Regular Interest corresponding to that
Loan Group as provided in the Preliminary Statement. Principal Relocation
Payments shall be made of principal allocations comprising the Principal
Remittance Amount from a Loan Group and shall include a proportionate
allocation of Realized Losses from the Mortgage Loans of such Loan Group.
"Principal Remittance Amount": With respect to any Distribution
Date, the sum of the Group 1 Principal Remittance Amount and the Group 2
Principal Remittance Amount.
"Private Certificates": Any of the Class B-4, Class B-5, 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 February 3, 2005 relating to the public offering of the Offered
Certificates.
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"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 Sections 4.01 and
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 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 in connection with any
violation by such Mortgage Loan of any predatory or abusive lending law.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx
Mae or Xxxxxxx Mac.
"Rating Agency" or "Rating Agencies": DBRS, Fitch, 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. To the extent the Servicer receives
Subsequent Recoveries with respect to any Liquidated Mortgage Loan, the amount
of the Realized Loss with respect to that Liquidated Mortgage Loan will be
reduced by such Subsequent Recoveries.
"Record Date": With respect to all of the Floating Rate
Certificates and any Distribution Date, the Business Day immediately preceding
such Distribution Date; provided, however, that if any such Certificate
becomes a Definitive Certificate, the Record Date for such Certificate shall
be the last Business Day of the month immediately preceding the month in which
such Distribution Date occurs. With respect to the Fixed Rate Certificates and
the Class N, Class X and Residual Certificates and any Distribution Date, the
last Business Day of the month immediately preceding the month in which such
Distribution Date occurs (or the Closing Date, in the case of the first
Distribution Date).
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or
under common control with the
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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 lending banks selected by the
Trustee (after consultation with the Servicer) 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-4 Certificates, the Class B-5 Certificates, the Class N Certificates
and the Class X Certificates.
"Related Documents": With respect to any Mortgage Loan, the
related Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Servicemembers Civil Relief Act, as amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act, the amount
by which (i) interest collectible on such Mortgage Loan during such Collection
Period is less than (ii) one month's interest on the Principal Balance of such
Mortgage Loan at the Mortgage Interest Rate for such Mortgage Loan before
giving effect to the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC Provisions:" Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the
foregoing may be in effect from time to time.
"REMIC Regular Interest": Any of the Master REMIC Regular
Interests, the Intermediate REMIC Regular Interests, the Subsidiary REMIC
Regular Interests and the Class X Interest.
"Remittance Report": A report prepared by the Servicer and
delivered to the Trustee pursuant to Section 4.07, containing the information
attached hereto as Exhibit P.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.
"REO Principal Amortization": With respect to any REO Property,
for any calendar month, the aggregate of all amounts received in respect of
such REO Property during such calendar month, whether in the form of rental
income, sale proceeds (including, without limitation, that portion of the
Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such
REO
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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.
"Required Basis Risk Reserve Fund Amount": With respect to any
Distribution Date on which the related Net Excess Spread is less than 0.25%,
an amount equal to the lesser of (x) $15,000 and (y) the product of (i) 0.50%
and (ii) the Pool Balance as of the last day of the related Collection Period.
With respect to any Distribution Date on which the Net Excess Spread is equal
to or greater than 0.25%, an amount equal to $5,000.
"Required Basis Risk Reserve Fund Deposit": With respect to any
Distribution Date, the excess, if any, of (i) the Required Basis Risk Reserve
Fund Amount over (ii) the amount of funds on deposit in the Basis Risk Reserve
Fund as of the close of business on the Business Day immediately preceding
such Distribution Date.
"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 and Class XR Certificates.
"Residual Interest": The sole Class of "residual interests" in
each REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and in each case having direct responsibility for
the administration of this Agreement.
"S&P": Standard & Poor's Ratings Services, a division of The
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.
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"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 Certificate": Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibits X-0, X-0, X-0, X-0, X-0, A-6 and A-7, executed by the Trustee on
behalf of the Trust and authenticated and delivered by the Certificate
Registrar, representing the right to distributions as set forth herein and
therein.
"Senior Certificateholders": Collectively, the Holders of the
Senior Certificates.
"Senior Principal Distribution Amount": With respect to any
Distribution Date, the sum of the Class AV Principal Distribution Amount and
the Class AF Principal Distribution Amount for such Distribution Date.
"Senior Credit Support Depletion Date": The Distribution Date on
which the aggregate Certificate Principal Balances of the Subordinate
Certificates has been reduced to zero.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balances of the Subordinate Certificates and (ii) the
Overcollateralization Amount, in each case after taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 42.90%.
"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,
the Business Day immediately preceding such Distribution Date.
"Servicer's Assignee": As defined in Section 6.05(c) hereof.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Servicer in the performance of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property, (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.
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"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, 0.507%
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.
"Servicing Standard": Shall mean the standards set forth in
Section 3.01.
"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.
"SPV": As defined in Section 6.05(b) hereof.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stayed Funds": Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the
Bankruptcy Code.
"Stepdown Date": The earlier to occur of (x) the later to occur of
(A) the Distribution Date in February 2008 and (B) the first Distribution Date
on which the Senior Enhancement Percentage (after taking into account
distributions of principal on such Distribution Date) is greater than or equal
to the Senior Specified Enhancement Percentage, and (y) the Distribution Date
on which the aggregate Certificate Principal Balance of the Senior
Certificates is reduced to zero.
"Sub Rate Cap": With respect to each Class of Subordinate
Certificates and any Distribution Date is the lesser of (i) the Subordinate
Cap for such Distribution Date and (ii) the Maximum Cap with respect to the
Subordinate Certificates for such Distribution Date.
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"Subordinate Cap": For any Distribution Date, the weighted average
of the Group Caps (each adjusted as necessary to an effective rate reflecting
the accrual of interest on an actual/360 basis) for Loan Group 1 and Loan
Group 2 and such Distribution Date (weighted on the basis of the excess of the
Group Balance of each such Loan Group as of the first day of the related
Collection Period over the Certificate Principal Balance of the Senior
Certificates related to such Loan Group on such Distribution Date (prior to
all distributions to be made on such Distribution Date)).
"Subordinate Certificates": The Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates.
"Subordinate Component Balance": For any Distribution Date and for
each Loan Group, the excess of the principal balance of such Loan Group as of
the first day of the related Due Period over the Certificate Principal Balance
of the Senior Certificates related to such Loan Group on such Distribution
Date (prior to all distributions to be made on such Distribution Date)(each
adjusted as necessary to an effective rate reflecting the accrual of interest
on an actual/360 basis for Loan Group 1 and on a 30/360 basis for Loan Group
2).
"Subsequent Recoveries": As to any Distribution Date, with respect
to a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior
calendar month, unexpected amounts received by the Servicer (net of any
related expenses permitted to be reimbursed pursuant to Section 3.09)
specifically related to such Liquidated Mortgage Loan.
"Subsidiary REMIC Regular Interest": As defined in the Preliminary
Statement.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 2.20% of the initial Pool Balance and
(y) on and after the Stepdown Date, (A) so long as a Trigger Event is not in
effect as of such Distribution Date, the greater of (i) 0.50% of the initial
Pool Balance and (ii) 4.40% of the Pool Balance as of the last day of the
related Collection Period, or (B) if a Trigger Event is in effect as of such
Distribution Date, the Targeted Overcollateralization Amount as of the
immediately preceding Distribution Date. The Targeted Overcollateralization
Amount will equal zero if Certificate Principal Balances of each of the
Offered Certificates and the Class B-4 and Class B-5 Certificates have been
reduced to zero.
"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.
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"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.
"Transfer": Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
"Trigger Event": With respect to any Distribution Date, if (i) the
six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 43.00%
of the Senior Enhancement Percentage; or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period (reduced by the aggregate amount of Subsequent Recoveries
received through the last day of such 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
------------------------------ ----------
February 2007 through January 2008 1.80%
February 2008 through January 2009 3.25%
February 2009 through January 2010 5.25%
February 2010 through January 2011 6.75%
February 2011 through January 2012 7.50%
February 2012 and thereafter 7.70%
"Trust": 2005-CB1 Trust, the trust created hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered
hereunder, with respect to a portion of which nine REMIC elections are to be
made, such entire Trust Fund consisting of: (i) such Mortgage Loans as from
time to time are subject to this Agreement, together with the Mortgage Files
relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any REO Property, together with all collections thereon and
proceeds thereof, (iii) the Trustee's rights with respect to the Mortgage
Loans under all insurance policies required to be maintained pursuant to this
Agreement and any proceeds thereof, (iv) the Depositor's rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby), and (v) the Collection Account, the Distribution Account, the Basis
Risk Reserve Fund 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.
"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,
0.0065% per annum.
"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": With respect to each Class of
Subordinate Certificates and any Distribution Date, the excess of (x) the
cumulative amount of Applied Realized Loss Amounts allocated to such class
pursuant to Section 4.03 for all Distribution Dates over (y) the cumulative
amount of payments in respect of Unpaid Realized Loss Amounts to such Class
for all prior Distribution Dates pursuant to Section 4.02(b) and any
reductions applied thereto as specified in Section 4.03 due to the receipt of
Subsequent Recoveries.
"VA Approved Lender": Those institutions that are approved by the
VA to act as servicer and mortgagee of record pursuant to the VA Regulations.
"VA Guaranty": The obligation of VA respecting the guaranty of a
VA Loan pursuant to the Servicemen's Readjustment Act of 1944, as amended.
"VA Regulations" Any and all regulations promulgated by the VA
under the Servicemen's Readjustment Act of 1944, as amended.
"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 and the Class B-4 and
Class B-5 Certificates shall be 98%. Such Voting Rights shall be allocated
among each such Class according to the fraction, expressed as a percentage,
the numerator of which is the aggregate Certificate Principal Balance of all
the Certificates of such Class then outstanding and the denominator of which
is the aggregate Certificate Principal Balance of all of the Certificates then
outstanding. The Voting Rights allocated to each such
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Class of Certificates shall be allocated among all Holders of each such Class
in proportion to the outstanding Certificate Principal Balance of such
Certificates; provided, however, that any Certificate registered in the name
of the Servicer, the Depositor, the Trustee or any of their respective
Affiliates shall not be included in the calculation of Voting Rights;
provided, further, 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 N and Class
X Certificates shall be 2%. The Residual Certificates shall have no Voting
Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based
on Principal Balance as of the first day of the related Collection Period or,
in the case of the first Distribution Date, the Cut-Off Date) of the Net
Mortgage Interest Rates of the Mortgage Loans, expressed as an annual rate and
calculated on the basis of twelve months consisting of 30 days each and a
360-day year.
"Written Order to Authenticate": A written order by which the
Depositor directs the Trustee to execute, authenticate and deliver the
Certificates.
Section 1.02 Accounting.
Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such
definition or calculation and any related definitions or calculations shall be
determined without duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey to the
Trustee, on behalf of the Trust, without recourse for the benefit of the
Certificateholders all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in
and to (i) each Mortgage Loan identified on the Mortgage Loan Schedule,
including the related Cut-off Date Principal Balance, all interest accruing
thereon after the Cut-off Date and all collections in respect of interest and
principal due after the Cut-off Date; (ii) the Mortgage File for each such
Mortgage Loan; (iii) property which secured each 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 all
rights under the related FHA Insurance Contracts and VA Guaranties; (v) all
proceeds of any of the foregoing; (vi) the rights of the Depositor under the
Mortgage Loan Purchase Agreement; and (vii) 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
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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 for the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB1, 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. Bank National Association, as Trustee
for the C-BASS Mortgage Loan Asset-Backed Certificates, Series
2005-CB1, without recourse";
(iv) an original, or a certified copy thereof, of any intervening
assignment of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy;
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;
(vii) for each FHA Loan, the original Mortgage Insurance Certificate;
and
(viii) for each VA Loan, the Loan Guaranty Certificate.
The Trustee agrees to execute and deliver (or cause the Custodian
to execute and deliver) to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
The Servicer shall 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
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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.
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.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Seller shall cause to be
completed such endorsements "Pay to the order of U.S. Bank National
Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB1, without recourse."
The Depositor herewith delivers to the Trustee executed copies of
the Mortgage Loan Purchase Agreement.
The Depositor and the Trustee on behalf of the Trust 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 HOEPA or any other
applicable predatory or abusive lending laws.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges the receipt of, subject to the provisions
of Section 2.01 and subject to the review described below and any exceptions
noted on the exception report described in the next paragraph below, the
documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage
File, and that it
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holds or will hold all such assets and such other assets included in the
definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any document delivered after the
Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to
certify, 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) (in the case of
(26), only as to whether there is 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, 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
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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 this
Agreement shall constitute a security agreement under applicable law and 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 (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) the Mortgage File for each such Mortgage Loan;
(iii) property which secured each 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 all rights under
the related FHA Insurance Contracts and VA Guaranties; (v) all proceeds of any
of the foregoing; (vi) the rights of the Depositor under the Mortgage Loan
Purchase Agreement; and (vii) all other assets included or to be included in
the Trust Fund.
Section 2.03 Repurchase or Substitution of Mortgage Loans by
the Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or
of the breach by the Seller of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any
Mortgage Loan which materially adversely affects the value of such Mortgage
Loan or the interest therein of the Certificateholders, the Trustee (or the
Custodian, as applicable) shall promptly notify the Seller and the Servicer of
such defect, missing document or breach and request that the Seller deliver
such missing document or cure such defect or breach within 120 days or 150
days following the Closing Date, in the case of missing Mortgages or
Assignments from the date the Seller was notified of such missing 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, 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). In addition to the foregoing, in case of a breach of
the Seller's representation set forth in Section 3.01(f) of the Mortgage Loan
Purchase Agreement, the Seller shall reimburse the Trust for all costs or
damages incurred by the Trust as a result of a violation of any predatory or
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abusive lending laws referred to therein (such amount, the "Reimbursement
Amount"). The Reimbursement Amount shall be delivered to the Servicer for
deposit into the Collection Account within 10 days from the date the Seller
was notified by the Trustee of the amount of all costs and damages. It is
understood and agreed that the obligation of the Seller to pay the
Reimbursement Amount for deposit into the Collection Account and either 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 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. 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
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of a substitution effected by the Seller, the Mortgage Loan Purchase
Agreement, including, in the case of a substitution effected by the Seller all
applicable representations and warranties thereof included in the Mortgage
Loan Purchase Agreement and all applicable representations and warranties
thereof set forth in Section 2.04, in each case as of the date of
substitution.
For any month in which the Seller substitutes one or more Eligible
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage
Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage
Loan, of the principal balance thereof as of the date of substitution,
together with one month's interest on such principal balance at the applicable
Net Mortgage Interest Rate. On the date of such substitution, the Seller will
deliver or cause to be delivered to the Servicer for deposit in the Collection
Account an amount equal to the Substitution Adjustment Amount, if any, and the
Trustee, upon receipt of the related Eligible Substitute Mortgage Loan or
Loans and certification by the Servicer of such deposit, shall release to the
Seller the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall deliver to it and as shall be necessary to vest therein any
Defective Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and
deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code, or (b) any REMIC to
fail to qualify as a REMIC at any time that any Certificate is outstanding. If
such Opinion of Counsel can not be delivered, then such substitution may only
be effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by the Seller, the Servicer or the Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the Seller shall repurchase or, subject to
the limitations set forth in Section 2.03(d), substitute one or more Eligible
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. In addition, upon discovery that a Mortgage Loan is defective
in a manner that would cause it to be a "defective obligation" within the
meaning of Treasury regulations relating to REMICs, the Seller shall cure the
defect or make the required purchase or substitution no later than 90 days
after the earlier of the discovery of the defect and receipt of notification
of the defect. Any such repurchase or substitution shall be made in the same
manner as set forth in Section 2.03(a), if made by the Seller. The Trustee
shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto
in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee, with respect to
the custody, acceptance, inspection and release of the Mortgage Files pursuant
to Sections 2.01, 2.02 and 2.03 and preparation and
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delivery of the certifications in the form of Exhibit F-1 and Exhibit F-2
shall be performed by the Custodian pursuant to the terms and conditions of
the Custodial Agreement. The fees and expenses of the Custodian shall be paid
by the Servicer.
Section 2.04 Representations and Warranties of the Seller with
Respect to the Mortgage Loans.
The Seller hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date or as of such
other date specifically provided herein:
(a) The representations and warranties made by the Seller pursuant
to Section 3.01 of the Mortgage Loan Purchase Agreement are hereby being made
to the Trustee and are true and correct as of the Closing Date.
(b) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved the application of 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 Custodian or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the interest
therein of the Certificateholders then, notwithstanding the Seller's lack of
knowledge with respect to the substance of such representation and warranty
being inaccurate at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
Upon discovery by the Depositor, the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties contained in
this Section that materially and adversely affects the value of any Mortgage
Loan or the interest therein of the Certificateholders, the party discovering
the breach shall give prompt written notice to the others and in no event
later than two Business Days from the date of such discovery. Within ninety
days of its discovery or its receipt of notice of any such missing or
materially defective documentation or any such breach of a representation or
warranty, the Seller shall promptly deliver such missing document or cure such
defect or breach in all material respects, or in the event such defect or
breach cannot be cured, the Seller shall repurchase the affected Mortgage Loan
or cause the removal of such Mortgage Loan from the Trust Fund and substitute
for it one or more Eligible Substitute Mortgage Loans, in either case, in
accordance with Section 2.03.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the
Certificateholders notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Seller set
forth in this Section 2.04 to cure, substitute for or repurchase a Mortgage
Loan pursuant to the Mortgage Loan
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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 each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Servicer is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry on its business as now being conducted,
except for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse
effect on the ability of the Servicer to conduct its business as it is
presently conducted, and is licensed, qualified and in good standing in
the states where the Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business of
the type conducted by the Servicer or to ensure the enforceability or
validity of each Mortgage Loan; the Servicer has the power and authority
to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Servicer, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally; and all requisite corporate action has been taken by
the Servicer to make this Agreement valid and binding upon the Servicer
in accordance with its terms;
(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, is an FHA Approved Mortgagee and a VA
Approved Lender in good standing to service mortgages, and has not been
suspended as a mortgagee or servicer by the FHA or VA 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 a VA Approved Lender 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
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Servicer unable to comply with HUD, Xxxxxx Mae, Xxxxxxx Mac, FHA or VA
eligibility requirements or which would require notification to any of
HUD, Xxxxxx Mae, Xxxxxxx Mac or FHA or VA;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy laws and general principles of equity;
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance
by the Servicer of or compliance by the Servicer with this Agreement or
the consummation of the transactions contemplated by this Agreement,
except for such consents, approvals, authorizations and orders, if any,
that have been obtained;
(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 fully furnished in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the Trustee,
the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Servicer, the Seller or the Trustee of a breach of any of the
foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of
the Certificateholders, the party discovering such
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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;
(v) The Depositor has been duly formed solely under the laws of
the State of Delaware and is validly existing as a limited liability
company 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
formation of limited liability agreement 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
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certificate of formation, limited liability agreement 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) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of the
United States or any other jurisdiction is required for the issuance of
the Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been
previously obtained or (c) the failure of which to obtain would not have
a material adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement;
and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party or of which any of its properties is the subject: (a) which if
determined adversely to the Depositor would have a material adverse
effect on the business, results of operations or financial condition of
the Depositor; (b) asserting the invalidity of this Agreement or the
Certificates; (c) seeking to prevent the issuance of the Certificates or
the consummation by the Depositor of any of the transactions
contemplated by this Agreement, as the case may be; (d) which might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement.
Section 2.07 Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it (or the Custodian, as bailee and Custodian of the
Trustee) of the Mortgage Files, subject to the provisions of Sections 2.01 and
2.02, and the Trustee acknowledges the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the Written Order to Authenticate executed by an officer
of the Depositor, has executed, and the Certificate Registrar has
authenticated and delivered to or upon the order of the Depositor, the
Certificates (other than the Class X and Residual Certificates) in minimum
dollar denominations or $25,000 and integral dollar multiples of $1 in excess.
The Class X Certificates and the Residual Certificates are issuable only in
minimum Percentage Interests of 10%. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.
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Section 2.08 Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders that as of the Closing Date or as
of such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
(a) its business, properties, assets or condition (financial or other),
(b) the performance of its obligations under this Agreement, (c) the
value or marketability of the Mortgage Loans, or (d) its ability to
foreclose on the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action
to authorize the execution, delivery and performance of this Agreement.
When executed and delivered, this Agreement will constitute the Seller's
legal, valid and binding obligations enforceable in accordance with its
terms, except as enforcement of such terms may be limited by (1)
bankruptcy, insolvency, reorganization, receivership, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies, (2) general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (3) public policy considerations
underlying the securities laws, to the extent that such policy
considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities.
(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
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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 2.09 Covenants of the Seller.
(a) The Seller hereby covenants that except for the transfer to
the Depositor, the Seller will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any lien on
any Mortgage Loan, or any interest therein; the Seller will notify the
Trustee, as assignee of the Depositor, of the existence of any lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend
the right, title and interest of the
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Trust, as assignee of the Depositor, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Seller;
provided, however that nothing in this Section 2.09 shall prevent or be deemed
to prohibit the Seller from suffering to exist upon any of the Mortgage Loans
any liens for municipal or other local taxes and other governmental charges if
such taxes or governmental charges shall not at the time be due and payable or
if the Seller shall currently be contesting the validity thereof in good faith
by appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto.
(b) The Seller hereby covenants that neither it nor any Affiliate
of the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller
nor any Affiliate of the Seller shall be deemed to directly solicit any
Mortgagor if the Seller responds to a request from a Mortgagor regarding a
refinancing or if the Mortgagor receives marketing materials which are
generally disseminated.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage servicers, and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement including, in the case of FHA Loans and VA Loans, taking all actions
that a mortgagee is permitted or required to take by the FHA or the VA, as
applicable (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 any such Mortgage Loan and in the case of VA Loans,
affect the VA Guaranty 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
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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 X 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 Servicer for any costs, liabilities or expenses incurred by the
Trustee in connection therewith. The Trustee agrees to provide such powers of
attorney within ten (10) days of the Servicer's request therefor.
In servicing and administering FHA Loans, the Servicer shall
comply strictly with the National Housing Act and the FHA Regulations and
administrative guidelines issued thereunder or pursuant thereto (insofar as
the same apply to any Mortgage Loan) and, to the extent permitted hereunder,
promptly discharge all of the obligations of the mortgagee thereunder and
under each Mortgage including the timely giving of notices, the essence hereof
being that the full benefits of each FHA Insurance Contract inure to the
Trustee, on behalf of the Certificateholders.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted
mortgage servicing practices of prudent lending institutions, the FHA
Insurance Contracts, where applicable, and the Certificateholders' reliance on
the Servicer.
The Servicer shall give prompt notice to the Trustee of any
action, of which the Servicer has actual knowledge, that purports to (i)
assert a claim against the Trust Fund or (ii) assert jurisdiction over the
Trust Fund.
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 Q no
later than the date on which the Servicer
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delivers the Remittance Report to the Trustee and the Trustee will make such
Officer's Certificate available on its website to the Class X
Certificateholder. 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.
The Trustee shall prepare and deliver to the Depositor and the
owner of the Class N and Class X Certificates, on a monthly basis, a statement
setting forth the amounts due and received with respect to Prepayment 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 the terms and provisions of any related Primary Insurance Policy
and Applicable Regulations, follow such collection procedures as it follows
with respect to mortgage loans comparable to the Mortgage Loans and held for
its own account. Further, the Servicer will take special care in ascertaining
and estimating annual ground rents, taxes, assessments, water rates, fire and
hazard insurance premiums, mortgage insurance premiums, and all other charges
that, as provided in the Mortgage, will become due and payable to that end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
In the event that any payment due under any Conventional Mortgage
Loan is not paid when the same becomes due and payable, or in the event the
Mortgagor fails to perform any other covenant or obligation under the Mortgage
Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as it shall deem to be in the best interest of
the Certificateholders. In the event that any payment due under any FHA Loan
becomes delinquent, the Servicer shall take all such actions as are in the
best interests of the Certificateholders and permitted under any applicable
FHA loss mitigation proceedings, including, but not limited to, requesting the
FHA to accept an assignment of such FHA Loan, and, upon the Servicer's
determination that foreclosure is in the best interest of the
Certificateholders, commencing foreclosure proceedings. With respect to any
defaulted Mortgage Loan, the Servicer shall have the right to review the
status of the related forbearance plan and, subject to the second paragraph of
Section 3.01, may modify such forbearance plan; including, extending the
Mortgage Loan repayment date for a period of one year or reducing the Loan
Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the
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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 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
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and shall establish and maintain one or more Collection Accounts. Each
Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily
basis within two Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Net Liquidation Proceeds and Subsequent Recoveries;
(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; and
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). The foregoing requirements for
deposit from the Collection Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of late payment charges, prepayment charges that are not Prepayment
Charges, and assumption fees need not be deposited by the Servicer in the
Collection Account.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf
of the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by the close of
business New York time on the Servicer Remittance Date, that portion of the
Available Funds (calculated without regard to the references in the definition
thereof to amounts that may be deposited to the Distribution Account from a
different source as provided herein) then on deposit in the Collection
Account.
(c) Funds in the Collection Account 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
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any change thereof. The Trustee shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and
prior to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(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 3.04, 3.15, 3.16, 3.22 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 Sections
3.04(b) and 3.04(d);
(ii) to reimburse itself for Advances and Servicing Advances; the
Servicer's right to reimburse itself pursuant to this subclause (ii)
being limited to amounts received on the related Mortgage Loan which
represent payments of (a) principal and/or interest respecting which any
such Advance was made or (b) Condemnation Proceeds, Insurance Proceeds
or Liquidation Proceeds respecting which any such Servicing Advance was
made;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed Advances to the extent that
such amounts are deemed to be Nonrecoverable Advances (including those
deemed to be Nonrecoverable
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Advances at the time a Mortgage Loan is modified), and to reimburse
itself for such amounts to the extent that such amounts are
nonrecoverable from the disposition of REO Property pursuant to Section
3.03 or Section 3.13 hereof;
(iv) to reimburse itself for any amounts paid pursuant to Section
3.03 (and not otherwise previously reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b)
the Servicing Fee from that portion of any payment or recovery as to
interest to a particular Mortgage Loan to the extent not retained
pursuant to Section 3.04(ii);
(vi) to pay or reimburse itself for any amounts payable or paid
pursuant to Section 6.03 (and not otherwise previously reimbursed);
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement; and
(viii) to reimburse itself for Advances from amounts in the
Collection Account held for future distributions that were not included
in Available Funds for the preceding Distribution Date. An amount equal
to the amount withdrawn from the Collection Account pursuant to this
subclause (viii) shall be deposited in the Collection Account by the
Servicer on the next succeeding Distribution Date that such funds are to
be distributed to Certificateholders.
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 Account.
The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time
deposit or demand accounts. A copy of such letter agreement shall be furnished
to the Trustee upon request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account on a daily basis
within two Business Days of receipt, and retain therein, (i) all Escrow
Payments collected on account of the Mortgage Loans, for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement, and (ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property. The Servicer shall make
withdrawals therefrom only to effect such payments as are required under this
Agreement, and for such other purposes as shall be set forth in, or in
accordance with, Section 3.07. The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution other than interest on escrowed funds required by law to be paid
to the Mortgagor and, to the
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extent required by the related Mortgage Loan or Applicable Regulations, the
Servicer shall pay interest on escrowed funds to the Mortgagor notwithstanding
that the Escrow Account is non-interest bearing or that interest paid thereon
is insufficient for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, fire, flood and hazard insurance premiums, Primary Insurance Policy
premiums, if applicable, and comparable items, (ii) to reimburse the Servicer
for any Servicing Advance made by the Servicer with respect to a related
Mortgage Loan but only from amounts received on the related Mortgage Loan
which represent late payments or Late Collections of Escrow Payments
thereunder, (iii) to refund to the Mortgagor any funds as may be determined to
be overages, (iv) for transfer to the Collection Account in accordance with
the terms of this Agreement, (v) for application to restoration or repair of
the Mortgaged Property, (vi) to pay to the Servicer, or to the Mortgagor to
the extent required by the related Mortgage Loan or Applicable Regulations,
any interest paid on the funds deposited in the Escrow Account, (vii) to clear
and terminate the Escrow Account on the termination of this Agreement, (viii)
to transfer to the Collection Account any insurance proceeds, or (ix) in the
case of FHA Loans, for transfer to the Collection Account, fire and 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, (i) the Servicer
shall determine whether any such payments are made by the Mortgagor in a
manner and at a time that is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien and
(ii) the Servicer 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
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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.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Trustee, claims to the
insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts
collected by the Servicer under any Primary Insurance Policy shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.05.
Section 3.09 Transfer of Accounts.
The Servicer may transfer the Collection Account or the Escrow
Account to a different depository institution from time to time. Upon such
transfer, the Servicer shall deliver to the Trustee and the Depositor, a
certification or letter agreement, as the case may be, as required pursuant to
Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each first lien
Mortgage Loan fire and hazard insurance with extended coverage as is customary
in the area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (i) the amount necessary to fully compensate for
any damage or loss to the improvements which are a part of such property on a
replacement cost basis, (ii) the Principal Balance of the Mortgage Loan, in
each case in an amount not less than such amount as is necessary to prevent
the Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the
amount required under applicable HUD/FHA/VA 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
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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.
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
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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 Xxx in the
Xxxxxx Mae 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 Trustee a certified true copy of the Fidelity Bond and
errors and omissions insurance policy and a statement from the surety and the
insurer that such Fidelity Bond and errors and omissions insurance policy
shall in no event be terminated or materially modified without thirty days'
prior written notice to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Servicer) in the name of the Trustee, on behalf of the
Certificateholders, or in the event the Trustee is not authorized or permitted
to hold title to real property in the state where the REO Property is located,
or would be adversely affected under the "doing business" or tax laws of such
state by so holding title, the deed or certificate of sale shall be taken in
the name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Servicer from an attorney duly licensed to practice
law in the state where the REO Property is located. Any Person or Persons
holding such title other than the Trustee shall acknowledge in writing that
such title is being held as nominee for the benefit of the Trustee.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end
of the third calendar year beginning after the year of its acquisition by the
Trust Fund for purposes of Section 860G(a)(8) of the Code or, at the expense
of the Trust Fund, request from the Internal Revenue Service, more than 60
days before the day on which the above-mentioned grace period would otherwise
expire, an extension of the above-mentioned grace period, unless the Servicer
obtains an Opinion of Counsel, addressed to the Servicer and the Trustee, to
the effect that the holding by the Trust Fund of such REO Property subsequent
to such period will not: (i) result in the imposition of any tax on
"prohibited transactions" as defined in Section 860F of the Code; or (ii)
cause any REMIC constituting any part of the Trust Fund to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such REO Property (subject to any conditions
contained in such Opinion of Counsel). The Servicer shall be entitled to be
reimbursed from the Collection Account for any costs incurred in obtaining
such Opinion of Counsel, as provided in Section 3.05.
Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provisions of
this Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would: (i) cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code; or (ii) subject any REMIC
constituting part of the Trust Fund to the
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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 the REMIC Provisions. The Servicer shall cause
each REO Property to be inspected promptly upon the acquisition of title
thereto and shall cause each REO Property to be inspected at least annually
thereafter. The Servicer shall make or cause to be made a written report of
each such inspection. Such reports shall be retained in the Mortgage Servicing
File and copies thereof shall be forwarded by the Servicer to the Trustee upon
request. The Servicer shall attempt to sell the same (and may temporarily rent
the same) on such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within two Business Days of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the related REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 3.10 hereof and the fees of any managing agent
acting on behalf of the Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating
statement shall be accompanied by such other information as the Trustee shall
reasonably request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the
best interest of the Certificateholders. If as of the date title to any REO
Property was acquired by the Servicer there were outstanding unreimbursed
Servicing Advances with respect to the REO Property, the Servicer, upon an REO
Disposition of such REO Property, shall be entitled to reimbursement for any
related unreimbursed Servicing Advances from proceeds received in connection
with such REO Disposition. The proceeds from the REO Disposition, net of any
payment to the Servicer as provided above, shall be deposited in the
Collection Account for distribution on the succeeding Servicer Remittance Date
in accordance with Section 4.01.
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Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by
the Mortgagor, the Servicer shall, except as set forth below, to the extent it
has knowledge of such conveyance or prospective conveyance, exercise its
rights to accelerate the maturity of the related Mortgage Loan under any
"due-on-sale" clause contained in the related Mortgage or Mortgage Note;
provided, however, that the Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. An Opinion of Counsel at the expense of the
Servicer (which expense shall constitute a Servicing Advance) delivered to the
Trustee and the Depositor to the foregoing effect shall conclusively establish
the reasonableness of such belief. In such event, the Servicer shall make
reasonable efforts to enter into an assumption and modification agreement with
the Person to whom such property has been or is about to be conveyed, pursuant
to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer
is authorized to enter into a substitution of liability agreement with such
Person, pursuant to which the original Mortgagor is released from liability
and such Person is substituted as Mortgagor and becomes liable under the Note.
In addition to the foregoing, the Servicer shall not be required to enforce
any "due-on-sale" clause if in the reasonable judgment of the Servicer,
entering into an assumption and modification agreement with a person to whom
such property shall be conveyed and releasing the original Mortgagor from
liability would be in the best interest of the Certificateholders.
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
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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 thereby without reimbursement therefor; provided,
however, the Servicer shall be held harmless with respect to any Mortgage
Interest Rate adjustments made by any prior servicer.
Section 3.16 Optional Purchases of Mortgage Loans by
Servicer.
The Servicer (or an Affiliate of the Servicer) may, at its option,
repurchase a Mortgage Loan or REO Property which becomes 120 or more days
Delinquent or for which the Servicer has accepted a deed in lieu of
foreclosure, during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
occurred with respect to such Mortgage Loan and ending on the last Business
Day of such calendar quarter. If the Servicer (or an Affiliate of the
Servicer) does not exercise its purchase right with respect to a Mortgage Loan
during the period specified in the preceding sentence, such Mortgage Loan
shall thereafter again become eligible for purchase pursuant to the preceding
sentence only after the Mortgage Loan ceases to be 120 days or more Delinquent
and thereafter becomes 120 days Delinquent again. The "Initial Delinquency
Date" of a Mortgage Loan shall mean the date on which the Mortgage Loan first
became 120 days Delinquent. Prior to repurchase pursuant to this Section 3.16,
the Servicer shall be required to continue to make monthly advances pursuant
to Section 4.07. The Servicer shall not use any procedure in selecting
Mortgage Loans to be repurchased which is materially adverse to the interests
of the Certificateholders. The Servicer shall purchase such (i) Delinquent
Mortgage Loan at a price equal to the Principal Balance of the Mortgage Loan
plus accrued interest thereon at the Mortgage Interest Rate from the date to
which interest has last been paid to the Trust Fund to the date of purchase
plus any unreimbursed Servicing Advances and Advances or (ii) REO Property at
its fair market value as determined in good faith by the Servicer. Any such
repurchase of a Mortgage Loan or REO Property pursuant to this Section 3.16
shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such Delinquent Mortgage Loan or REO
Property to the Servicer to the extent necessary, including the prompt
delivery of all documentation to the Servicer.
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Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes), the Servicer shall deliver
to the Trustee (or the Custodian as the case may be) two executed copies of a
completed "Request for Release" in the form of Exhibit E. Upon receipt of such
Request for Release of Documents, the Trustee (or the Custodian as the case
may be) shall promptly release the related Mortgage File, in trust to (i) the
Servicer, or (ii) such other party identified in the related Request for
Release. Upon any such payment in full, or the receipt of such notification
that such funds have been placed in escrow, the Servicer shall direct the
Trustee in writing to execute an instrument of satisfaction (or assignment of
Mortgage without recourse) regarding the Mortgaged Property relating to such
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of payment in full, it being understood and agreed that no expense
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account. In lieu of
executing any such satisfaction or assignment, as the case may be, the
Servicer may prepare and submit to the Trustee a satisfaction (or assignment
without recourse, if requested by the Person or Persons entitled thereto) in
form for execution by the Trustee with all requisite information completed by
the Servicer; in such event, the Trustee shall execute and acknowledge such
satisfaction or assignment, as the case may be, and deliver the same with the
related Mortgage File, as aforesaid.
(b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy
relating to a Mortgage Loan, the Trustee shall (except in the case of the
payment or liquidation pursuant to which the related Mortgage File is released
to an escrow agent or an employee, agent or attorney of the Trustee), upon
written request of the Servicer and delivery to the Trustee (or the Custodian,
as the case may be) of two executed copies of a "Request for Release" in the
form of Exhibit E signed by a Servicing Officer, release the related Mortgage
File to the Servicer and shall execute such documents as shall be necessary to
the prosecution of any such proceedings, including, without limitation, an
assignment without recourse of the related Mortgage to the Servicer. Such
receipt shall obligate the Servicer to return the Mortgage File to the Trustee
(or the Custodian, as the case may be) when the need therefor by the Servicer
no longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a Request for Release evidencing such liquidation, the receipt
shall be released by the Trustee (or the Custodian, as the case may be) to the
Servicer.
(c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of
properties subject to Mortgages and (iv) second mortgage subordination
agreements. No application for approval shall be considered by the Servicer
unless: (w) it has received an Opinion of Counsel, addressed to the Trustee
(which opinion shall not be an expense of the Trustee or the Trust Fund) that
such sale, disposition, substitution, acquisition or contribution will not
affect adversely the status of any REMIC constituting part of the Trust Fund
as a REMIC or cause any REMIC constituting part of the Trust Fund to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC
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Provisions; (x) the provisions of the related Note and Mortgage have been
complied with; (y) the Combined Loan-to-Value Ratio and debt-to-income ratio
after any release does not exceed the maximum Combined Loan-to-Value Ratio and
debt-to-income ratio established in accordance with the underwriting standards
of the Mortgage Loans; and (z) the lien priority of the related Mortgage is
not affected. Upon receipt by the Trustee of a Servicing Officer's certificate
setting forth the action proposed to be taken in respect of a particular
Mortgage Loan and certifying that the criteria set forth in the immediately
preceding sentence have been satisfied, the Trustee shall execute and deliver
to the Servicer the consent or partial release so requested by the Servicer. A
proposed form of consent or partial release, as the case may be, shall
accompany any Servicing Officer's certificate delivered by the Servicer
pursuant to this paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall
be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties). The Servicer shall be entitled to
retain additional servicing compensation in the form of release fees, bad
check charges, assumption fees, modification or extension fees, late payment
charges, 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 Annual 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 2006, 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
2006, 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
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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 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 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 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 Mortgage
Loans for the related Distribution Date resulting from Principal Prepayments
on the Mortgage Loans during the related Prepayment Period and (B) 50% of its
aggregate Servicing Fee received in the related Collection Period. The
Servicer shall apply Compensating Interest to offset any Prepayment Interest
Shortfalls on the Mortgage Loans. The Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee for deposit in the
Distribution Account in respect of Compensating Interest. Such amounts so
remitted shall be included in the Available Funds and distributed therewith on
the next Distribution Date. The Servicer shall not be obligated to pay
Compensating Interest with respect to Relief Act Interest Shortfalls.
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Section 3.23 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 3.24 Obligations of the Servicer in Respect of Credit
Reporting.
The Servicer will fully furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (i.e., 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 for each Mortgage Loan.
Section 3.25 Investment of Funds in the Collection Account
and the Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account to invest the funds in the Collection Account in one or
more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day
immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon, and (ii) no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. In the absence of such
direction, funds in the Collection Account shall remain uninvested. Any such
Permitted Investments shall be held to maturity, unless payable on demand.
Funds in the Distribution Account shall be uninvested. Any investment of funds
in the Collection Account shall be made in the name of the Servicer. In the
event amounts on deposit in the Collection Account are at any time invested in
a Permitted Investment payable on demand, the Trustee shall at the direction
of the Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Collection Account.
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(b) All income and gain realized from the investment of funds in
the Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
The Trustee shall not in any way be held liable by reason of any
insufficiency in any Account held by the Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that
the Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Servicer
(except the Trustee if it is required to succeed the Servicer hereunder)
indemnifies and holds the Trustee, the Seller, the Depositor and each
Certificateholder harmless against any and all claims, losses, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and
any other costs, fees and expenses that the Trustee, the Depositor and any
Certificateholder may sustain in any way related to the failure of the
Servicer to perform its duties and service the Mortgage Loans in compliance
with the Servicing Standards. The Servicer shall immediately notify the
Trustee, the Depositor and each Certificateholder if a claim is made that may
result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Servicer shall assume (with the consent of the Trustee) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against the Servicer, the Trustee, the Depositor and/or
Certificateholder in respect of such claim. The provisions of this Section
3.26 shall survive the termination of this Agreement and the payment of the
outstanding Certificates.
(b) None of the Depositor, the Seller, the Servicer, or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller or the Servicer or any such Person against any breach of
warranties or representations made herein, or against 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.
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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.
Section 3.28 Protection of Assets.
(a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell
assets; or
(3) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.
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Section 3.29 Periodic Filings.
(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 3.29, and, without limiting the Trustee's
responsibility hereunder, otherwise to assist the Trustee in fulfilling its
duties under this Section 3.29.
(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 (i) 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 (ii) 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 V (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 W) for the benefit of the Servicer and its
officers, directors and Affiliates regarding certain aspects of the
Certification (the "Trustee Certification") (provided, however, that the
Trustee shall not undertake an analysis of the accountant's report attached as
an exhibit to the Form 10-K). 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 3.29(b),
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(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 3.29(d) 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 3.29(c) 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 3.29 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 3.29 in order to comply with
such amended reporting requirements and such amendment of this Section 3.29.
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 amendment pursuant to this
Section 3.29 that adversely affects its obligations and immunities 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 Group 1 Interest Remittance Amount, and the Group 2
Interest Remittance Amount and apply them in the following order of priority
(based upon the Mortgage Loan information provided to it in the Remittance
Report, upon which the Trustee may conclusively rely, and the
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calculations required to be made by the Trustee), in each case to the extent
of the Group 1 Interest Remittance Amount or the Group 2 Interest Remittance
Amount, as applicable, remaining for such Distribution Date:
(a) the Group 1 Interest Remittance Amount will be distributed:
(i) first, to the Trustee, the portion of the Trustee Fee for such
Distribution Date relating to the Group 1 Mortgage Loans;
(ii) second, concurrently, to the Class AV Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for each
such Class and Distribution Date, allocated pro rata based on
entitlement pursuant to this clause (a)(ii); and
(iii) third, to the Class AF Certificates, the Accrued Certificate
Interest and Interest Carry Forward Amount for each such Class and such
Distribution Date, in each case to the extent not paid pursuant to
clause (b)(ii) below.
(b) the Group 2 Interest Remittance Amount will be distributed:
(i) first, to the Trustee, the portion of the Trustee Fee for such
Distribution Date relating to the Group 2 Mortgage Loans;
(ii) second, concurrently, to the Class AF Certificates, the
Accrued Certificate Interest and Interest Carry Forward Amount for each
such Class and Distribution Date, allocated pro rata based on
entitlement pursuant to this clause (b)(ii); and
(iii) third, to the Class AV Certificates, the Accrued Certificate
Interest and Interest Carry Forward Amount for each such Class and such
Distribution Date, in each case to the extent not paid pursuant to
clause (a)(ii) above.
(c) any Group 1 Interest Remittance Amount and Group 2 Interest
Remittance Amount remaining undistributed following the distributions pursuant
to clauses (a) and (b) above will be distributed:
(i) first, to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ii) second, to the Class M-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(iii) third, to the Class M-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
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(iv) fourth, to the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date;
(v) fifth, to the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vi) sixth, to the Class B-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vii) seventh, to the Class B-4 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date; and
(viii) eighth, to the Class B-5 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date.
(d) the amount, if any, of the Group 1 Interest Remittance Amount
and the Group 2 Interest Remittance Amount remaining after application with
respect to the priorities set forth above will be applied as described under
Section 4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess
Cashflow Amounts.
(a) On each Distribution Date, the Trustee shall distribute the
Group 1 Principal Distribution Amount and the Group 2 Principal Distribution
Amount in the following amounts and order of priority (based upon the Mortgage
Loan information provided to it in the Remittance Report), and the
calculations required to be made by the Trustee, in each case to the extent of
the Group 1 Principal Distribution Amount or the Group 2 Principal
Distribution Amount, as applicable, remaining for such Distribution Date:
(i) With respect to any Distribution Date before the Stepdown Date
or with respect to which a Trigger Event is in effect:
(A) the Group 1 Principal Distribution Amount will be
distributed:
(1) first, to the Class AV Certificates (allocated
among the classes of Class AV Certificates in the priority
described in clause (iii)(A) below), until the Certificate
Principal Balance thereof has been reduced to zero; and
(2) second, to the Class AF Certificates (allocated
among the classes of Class AF Certificates in the priority
described in clause (iii)(B) below), until the Certificate
Principal Balances thereof have been reduced to zero, to the
extent not paid pursuant to clause (B)(1) below;
(B) the Group 2 Principal Distribution Amount will be
distributed:
(1) first, to the Class AF Certificates (allocated
among the classes of Class AF Certificates in the priority
described in clause (iii)(B)
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below), until the Certificate Principal Balance thereof has
been reduced to zero; and
(2) second, to the Class AV Certificates (allocated
among the classes of Class AV Certificates in the priority
described in clause (iii)(A) below), until the Certificate
Principal Balances thereof have been reduced to zero, to the
extent not paid pursuant to clause (A)(1) above;
(C) any Group 1 Principal Distribution Amount and Group 2
Principal Distribution Amount remaining undistributed following
the distributions pursuant to clauses (a)(i)(A) and (a)(i)(B)
above will be distributed:
(1) first, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(2) second, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(3) third, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(4) fourth, to the Class B-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(5) fifth, to the Class B-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(6) sixth, to the Class B-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero;
(7) seventh, to the Class B-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero; and
(8) eighth, to the Class B-5 Certificates, until the
Certificate Principal Balance thereof has been reduced to
zero.
(D) the amount, if any, of the Group 1 Principal
Distribution Amount and the Group 2 Principal Distribution Amount
remaining after application with respect to the priorities set
forth above in clauses (i)(A), (i)(B), (i)(C) and (i)(D) will
constitute part of the "Monthly Excess Cashflow Amount" for such
Distribution Date and will be applied as set forth in Section
4.02(b).
(ii) With respect to any Distribution Date on or after the
Stepdown Date and with respect to which a Trigger Event is not in
effect:
(A) the Group 1 Principal Distribution Amount will be
distributed:
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(1) first, to the Class AV Certificates (allocated
among the classes of Class AV Certificates in the priority
described in clause (iii)(A) below), the Class AV Principal
Distribution Amount, until the Certificate Principal Balance
of such Class has been reduced to zero; and
(2) second, to the Class AF Certificates (allocated
among the classes of Class AF Certificates in the priority
described in clause (iii)(B) below), any remaining Class AV
Principal Distribution Amount, until the Certificate
Principal Balance of each such Class has been reduced to
zero;
(B) the Group 2 Principal Distribution Amount will be
distributed:
(1) first, to the Class AF Certificates (allocated
among the classes of Class AF Certificates in the priority
described in clause (iii)(B) below), the Class AF Principal
Distribution Amount, until the Certificate Principal Balance
of such Class has been reduced to zero; and
(2) second, to the Class AV Certificates (allocated
among the classes of Class AV Certificates in the priority
described in clause (iii)(A) below), any remaining Class AF
Principal Distribution Amount until the Certificate
Principal Balance of each such Class has been reduced to
zero;
(C) any Group 1 Principal Distribution Amount and Group 2
Principal Distribution Amount remaining undistributed following
the distributions pursuant to clauses (ii)(A) and (ii)(B) above
will be distributed:
(1) first, to the Class M-1 Certificates, the Class
M-1 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero;
(2) second, to the Class M-2 Certificates, the Class
M-2 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been
reduced to zero;
(3) third, to the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero;
(4) fourth, to the Class B-1 Certificates, the Class
B-1 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been
reduced to zero;
(5) fifth, to the Class B-2 Certificates, the Class
B-2 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero;
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(6) sixth, to the Class B-3 Certificates, the Class
B-3 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero.
(5) seventh, to the Class B-4 Certificates, the Class
B-4 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero;
and
(6) eighth, to the Class B-5 Certificates, the Class
B-5 Principal Distribution Amount, until the Certificate
Principal Balance of such Class has been reduced to zero.
(D) the amount, if any, of the Group 1 Principal
Distribution Amount and the Group 2 Principal Distribution Amount
remaining after application with respect to the priorities set
forth above in clauses (ii)(A), (ii)(B) and (ii)(C) will
constitute part of the "Monthly Excess Cashflow Amount" for such
Distribution Date and will be applied as set forth in Section
4.02(b).
(iii) All principal distributions with respect to the Class AV
Certificates or Class AF Certificates will be distributed as follows:
(A) With respect to the Class AV Certificates, all principal
distributions will be distributed first, to the Class AV-1
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero, second, to the Class AV-2
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero and third, to the Class AV-3
Certificates, until the Certificate Principal Balance of such
Class has been reduced to zero.
(B) With respect to the Class AF Certificates, all principal
distributions will be distributed first, to the Class AF-4
Certificates, the Class AF-4 Principal Distribution Amount and
second, sequentially, to the Class AF-1, Class AF-2, Class AF-3
and Class AF-4 Certificates, until the Certificate Principal
Balance of such Class has been reduced to zero.
(iv) Notwithstanding anything else contained herein to the
contrary, on each Distribution Date on and after the Senior Credit
Support Depletion Date, the Group 1 Principal Distribution Amount and
Group 2 Principal Distribution Amount will be distributed concurrently
as principal on the classes of related Senior Certificates, pro rata, in
accordance with their respective Class Certificate Balances immediately
before that Distribution Date.
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to the Class or Classes of Certificates then entitled to
receive distributions in respect of principal, in an amount equal to the
Extra Principal Distribution Amount for
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such Distribution Date, payable to such holders as part of the related
Principal Distribution Amount;
(ii) to the Class M-1 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(iii) to the Class M-1 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(iv) to the Class M-1 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(v) to the Class M-2 Certificates, any remaining Accrued
Certificate Interest for such Classes and Distribution Date;
(vi) to the Class M-2 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(vii) to the Class M-2 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(viii) to the Class M-3 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(ix) to the Class M-3 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(x) to the Class M-3 Certificates, the Unpaid Realized Loss Amount
for such Class and Distribution Date;
(xi) to the Class B-1 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xii) to the Class B-1 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xiii) to the Class B-1 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(xiv) to the Class B-2 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xv) to the Class B-2 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xvi) to the Class B-2 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date
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(xvii) to the Class B-3 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xviii) to the Class B-3 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xix) to the Class B-3 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(xx) to the Class B-4 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xxi) to the Class B-4 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xxii) to the Class B-4 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date
(xxiii) to the Class B-5 Certificates, any remaining Accrued
Certificate Interest for such Class and Distribution Date;
(xxiv) to the Class B-5 Certificates, the Interest Carry Forward
Amount for such Class and Distribution Date, if any;
(xxv) to the Class B-5 Certificates, the Unpaid Realized Loss
Amount for such Class and Distribution Date;
(xxvi) to the Basis Risk Reserve Fund, the Basis Risk Reserve Fund
Deposit;
(xxvii) to pay the Class N Certificates, (x) the Accrued
Certificate Interest for the Class N Certificates, (y) the Interest
Carry Forward Amount for the Class N Certificates and (z) any remaining
Monthly Excess Cashflow Amount to reduce the Notional Amount for the
Class N Certificates, until the Notional Amount for such Class has been
reduced to zero; and
(xxviii) to the Class X Certificates, the Class X Distributable
Amount.
On each Distribution Date, there shall be distributed to Holders
of the Residual Certificates, any remaining amount in the Distribution
Account on such date after the application pursuant to Sections 4.01,
4.02(a), 4.02(b)(i)-(xxviii) and 4.02(c).
(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 for so long as the Notional Amount of the Class N Certificates is
greater than zero pursuant to Section 4.02(b)(xxvii) above), and to the Class
X Certificates after the Class N Notional Amount has been reduced to zero.
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(d) If Subsequent Recoveries have been received with respect to a
Liquidated Mortgage Loan, the amount of such Subsequent Recoveries will be
applied sequentially, in the order of payment priority, to increase the
Certificate Principal Balance of each Class of Certificates to which Applied
Realized Loss Amounts have been allocated, but in each case by not more than
the amount of Applied Realized Loss Amounts previously allocated to that Class
of Certificates pursuant to Section 4.03. Holders of such Certificates will
not be entitled to any payment in respect of the Accrued Certificate Interest
on the amount of such increases for any Interest Accrual Period preceding the
Distribution Date on which such increase occurs. Any such increases shall be
applied pro rata to the Certificate Principal Balance of each Certificate of
such Class.
Section 4.03 Allocation of Losses.
(a) If, after giving effect to the distribution of the Principal
Distribution Amount on any Distribution Date the aggregate Certificate
Principal Balance of the Offered Certificates and the Class B-4 and Class B-5
Certificates exceeds the Pool Balance as of the end of the related Collection
Period, such excess will be allocated to reduce the Certificate Principal
Balance of the Class B-5, Class B-4, Class B-3, Class B-2, Class B-1, Class
M-3, Class M-2 and Class M-1 Certificates, in that order, until the respective
Certificate Principal Balances thereof are reduced to zero. Any reduction of a
Certificate Principal Balance of a Class of Subordinate Certificates pursuant
to this paragraph (a) and paragraph (b) immediately below is an "Applied
Realized Loss Amount" for such Class.
(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% 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, 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.
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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 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;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class X Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the
Overcollateralization Target Amount as of such Distribution Date and the
Monthly Excess Interest Amount and Monthly Excess Cashflow Amount for
such Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Servicer during the related Collection Period;
(v) the aggregate amount of Advances in respect of the Trust Fund
and each Loan Group for the related Collection Period;
(vi) the Pool Balance and each Group Balance at the close of
business at the end of the related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans in the
Trust Fund and in each Loan Group as of the related Due Date;
(viii) the number and aggregate unpaid principal balance of
Mortgage Loans in the Trust Fund and in each Loan Group (a) 30 to 59
days past due on a contractual basis,
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(b) 60 to 89 days past due on a contractual basis, (c) 90 or more days
past due on a contractual basis, (d) as to which foreclosure proceedings
have been commenced and (e) in bankruptcy as of the close of business on
the last day of the calendar month preceding such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Loan Group of
such Mortgage Loan, the unpaid principal balance and the Principal
Balance of such Mortgage Loan as of the date it became an REO Property;
(x) the book value of any REO Property as of the close of business
on the last Business Day of the calendar month preceding the
Distribution Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties in the Trust Fund and each Loan
Group as of the close of business of the last day of the preceding
Collection Period;
(xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period, both for the Trust Fund as a whole as well as
for each Loan Group;
(xii) the aggregate amount of Prepayment Charges collected
(including amounts deposited in connection with the full or partial
waiver of such Prepayment 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,
in each case for the Trust Fund as a whole as well as for each Loan
Group;
(xiv) the Certificate Principal Balance, or Notional Amount, as
applicable, of each Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses or Applied Realized
Loss Amounts, as applicable, made on such Distribution Date, separately
identifying any reduction thereof due to allocations of Realized Losses
or Applied Realized Loss Amounts;
(xv) the Accrued Certificate Interest in respect of each Class of
Offered Certificates and the Class B-4 and Class B-5 Certificates for
such Distribution Date, separately identifying the portions thereof
attributable to Net Rate Carryover Amounts (in the case of the Class AV
Certificates and the Subordinate Certificates), and the respective
portions thereof, if any, remaining unpaid following the distributions
made in respect of such Certificates on such Distribution Date;
(xvi) the aggregate amount of any Prepayment Interest Shortfalls
for such Distribution Date, to the extent not covered by payments by the
Servicer pursuant to Section 3.22;
(xvii) the amount of the Trustee Fee paid;
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(xviii) the beginning and ending balances of the Basis Risk
Reserve Fund on such Distribution Date, the Basis Risk Reserve Fund
Deposit for such Distribution Date, and the Required Basis Risk Reserve
Fund Amount for such Distribution Date;
(xix) the Net Rate Carryover Amounts distributed on such
Distribution Date, and any Net Rate Carryover Amounts remaining after
giving effect to distributions thereof on such Distribution Date;
(xx) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xxi) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xxii) the Available Funds;
(xxiii) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxiv) the Liquidation Report for such Distribution Date;
(xxv) the aggregate Principal Balance of Mortgage Loans in each
Loan Group and in the Trust Fund purchased by the Servicer or Seller
during the related Collection Period and indicating the Section of this
Agreement requiring or allowing the purchase of each such Mortgage Loan;
and
(xxvi) the aggregate Principal Balance of the Mortgage Loans in
each Loan Group and in the Trust Fund repurchased by the Servicer (or an
Affiliate) during the related Collection Period in connection with
Section 3.16.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the
Servicer.
In the case of information furnished pursuant to subclauses (i)
through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Certificateholder of a Regular Certificate, if
requested in writing by such Person, such information as is reasonably
necessary to provide to such Person a statement containing the information set
forth in subclauses (i), (ii), (xv) and (xx) above, aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
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(c) On each Distribution Date, the Trustee shall provide to the
Residual Certificateholders a copy of the reports provided to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to
Residual Certificateholders by the Trustee pursuant to any requirements of the
Code as from time to time in force.
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 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
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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 pursuant
to Section 3.05(viii). 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 Nonrecoverable Advance,
shall be evidenced by an Officers' Certificate of the Servicer delivered to
the Depositor and the Trustee.
Section 4.08 Basis Risk Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain
in its name, in trust for the benefit of the Holders of the Class AV
Certificates and the Subordinate Certificates Certificates, the Basis Risk
Reserve Fund. The Basis Risk Reserve Fund shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not
be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
(b) On the Closing Date, $5,000 will be deposited by the Seller
into the Basis Risk Reserve Fund. On each Distribution Date, the Trustee shall
transfer from the Distribution Account to the Basis Risk Reserve Fund pursuant
to Section 4.02(b)(xxvi), the Basis Risk Reserve Fund Deposit. Following the
deposit of the Basis Risk Reserve Fund Deposit in the
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Basis Risk Reserve Fund on such Distribution Date pursuant to Section
4.02(b)(xx) hereof, the Trustee shall withdraw any amounts on deposit in the
Basis Risk Reserve Fund in the following amounts and order of priority:
(i) amounts attributable to Monthly Excess Cashflow Amounts in
respect of Loan Group 1 to the Class AV Certificates any unpaid Net Rate
Carryover Amounts for such Classes;
(ii) to the Class M-1 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(iii) to the Class M-2 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(iv) to the Class M-3 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(v) to the Class B-1 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(vi) to the Class B-2 Certificates, any unpaid Net Rate Carryover
Amounts for such Class;
(vii) to the Class B-3 Certificates, any unpaid Net Rate Carryover
Amounts for such Class.
(viii) to the Class B-4 Certificates, any unpaid Net Rate
Carryover Amounts for such Class; and
(ix) to the Class B-5 Certificates, any unpaid Net Rate Carryover
Amounts for such Class.
Any such amounts distributed shall be treated for federal tax
purposes as amounts distributed by the Class X REMIC to the Class X Interest.
On any Distribution Date, any amounts on deposit in the Basis Risk Reserve
Fund in excess of the Required Basis Risk Reserve Fund Amount shall be
distributed first to the Class N Certificates and then to the Class X
Certificates in the same manner as if distributed pursuant to Sections
4.02(b)(xxvii) and (xxviii) hereof.
(c) Funds in the Basis Risk Reserve Fund may be invested in
Eligible Investments by the Trustee at the direction of the majority holder of
the Class X Certificates. In the absence of such direction, funds in the Basis
Risk Reserve Fund shall remain uninvested. Any net investment earnings on such
amounts shall be payable to the Class X Certificates. Amounts held in the
Basis Risk Reserve Fund from time to time shall continue to constitute assets
of the Trust Fund, but not of any REMIC created hereunder, until released from
the Basis Risk Reserve Fund pursuant to this Section 4.08. The Basis Risk
Reserve Fund constitutes an "outside reserve fund" within the meaning of
Treasury Regulation ss.1.860G-2(h) and is not an asset of any REMIC created
hereunder. For all federal tax purposes, amounts transferred by the Class X
REMIC to
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the Basis Risk Reserve Fund shall be treated as amounts distributed by the
Class X REMIC to the Class X Certificates. The Class X Certificates shall
evidence ownership of the Basis Risk Reserve Fund for federal tax purposes and
the Holders thereof shall direct the Trustee in writing as to the investment
of amounts therein. In the absence of such written direction, all funds in the
Basis Risk Reserve Fund shall remain uninvested. The Trustee shall have no
liability for losses on investments in Eligible Investments made pursuant to
this Section 4.08(c) (other than as obligor on any such investments). Upon
termination of the Trust Fund, any amounts remaining in the Basis Risk Reserve
Fund shall be distributed first to the Class N Certificates and then to the
Class X Certificates in the same manner as if distributed pursuant to Sections
4.02(b)(xxi) and (xxii) hereof.
(d) On the Distribution Date immediately after the Distribution
Date on which the aggregate Class Principal Balance of each Class of
Certificates entitled to Net Rate Carryover Amounts equals zero, any amounts
on deposit in the Basis Risk Reserve Fund not payable on such Classes of
Certificates shall be distributed first to the Class N Certificates and then
to the Class X Certificates in the same manner as if distributed pursuant to
Sections 4.02(b)(xxvii) and (xxviii) hereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Certificates shall be substantially in the forms
annexed hereto as exhibits, and shall, on original issue, be executed by the
Trustee and authenticated and delivered by the Certificate Registrar to or
upon the receipt of a Written Order to Authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund.
Each Class of the Offered Certificates and the Class B-4 and Class B-5
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 $1.00 in excess thereof. The
Class N, Class X, Class R and Class XR 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 Offered Certificates and the Class B-4 and
Class B-5 Certificates shall be
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Book-Entry Certificates. The Class N, Class X, Class R and Class XR
Certificates shall not be Book-Entry Certificates but shall be issued in fully
registered certificate form.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall initially
serve as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee as
Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Servicer and the Depositor, such
resignation to become effective upon appointment of a successor Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Residual
Certificate, upon satisfaction of the conditions set forth below, the Trustee
on behalf of the Trust shall execute and the Certificate Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
the Certificate Registrar shall authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer
satisfactory to the Trustee and the Certificate Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Custodian, on behalf of the Depository, if directed
to do so pursuant to instructions from the Depository. Except as provided in
paragraph (c) below, the Book-Entry Certificates shall at all times remain
registered in the name of the Depository or its nominee and at all times: (i)
registration of such Certificates may not be transferred by the Trustee except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration
of such Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iv) the Depository may
collect its usual and customary fees, charges and
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expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners
of the Certificates for purposes of exercising the rights of Holders under
this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect
Certificate Owners; and (vii) the direct participants of the Depository shall
have no rights under this Agreement under or with respect to any of the
Certificates held on their behalf by the Depository, and the Depository may be
treated by the Trustee and its agents, employees, officers and directors as
the absolute owner of the Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee
in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository and (y) the Trustee or the
Depositor is unable to locate a qualified successor, (ii) the Depositor, at
its sole option, with the consent of the Trustee, elects to terminate the
book-entry system through the Depository or (iii) after the occurrence of a
Servicer Event of Termination, the Certificate Owners of each Class of
Book-Entry Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advises the Trustee and Depository through the
Financial Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate
Owners. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall, at the Depositor's
expense, in the case of (ii) above, or the Seller's expense, in the case of
(i) and (iii) above, execute on behalf of the Trust and the Certificate
Registrar shall authenticate the Definitive Certificates. None of the
Depositor or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee, the Certificate Registrar, the Servicer, any Paying Agent and the
Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Private
Certificates by the Depositor, no transfer, sale, pledge or other disposition
of any Private Certificate shall be made unless such disposition is exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "1933 Act"), and any applicable state securities laws or is made in
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accordance with the 1933 Act and laws. In the case of Private Certificates
that are not Book-Entry Certificates, in the event of any such transfer:(i)
unless such transfer is made to (x) a "qualified institutional buyer" (as
defined in Rule 144A) in reliance upon Rule 144A (as evidenced by the
applicable investment letter delivered to the Certificate Registrar, in
substantially the form attached hereto as Exhibit J) under the 1933 Act or (y)
an institutional investor that is an "accredited investor" (as defined in
Clauses (1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Act) (as
evidenced by the applicable investment letter delivered to the Certificate
Registrar, in substantially the form attached hereto as Exhibit J), the
Certificate Registrar and the Depositor shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Certificate Registrar and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the 1933 Act or is being
made pursuant to the 1933 Act, which Opinion of Counsel shall not be an
expense of the Certificate Registrar or the Depositor or (ii) the Certificate
Registrar shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Certificate Registrar certifying to the Depositor and
the Certificate Registrar the facts surrounding such transfer, which
investment letter shall not be an expense of the Certificate Registrar or the
Depositor. The Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Certificate Registrar
and the Depositor against any liability that may result if the transfer is not
so exempt or is not made in accordance with such federal and state laws. In
the case of Private Certificates that are Book-Entry Certificates, each
Certificate Owner is required to be either (x) a "qualified institutional
buyer" (as defined in Rule 144A) in reliance upon Rule 144A under the 1933 Act
or (y) an institutional investor that is an "accredited investor" (as defined
in Clauses (1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Act),
and each such Certificate Owner shall be deemed to make the representations,
warranties and covenants in the applicable investment letter attached hereto
as Exhibit J.
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 Servicer, 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 or arrangement subject to Section 4975 of the
Code, nor a person acting on behalf of any such plan or arrangement or using
the assets of any such plan or arrangement to effect such transfer or (ii)
(except in the case of a Class R, Class XR or Class X 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 satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60 or (iii) in the case
of any ERISA-Restricted Certificate presented for registration in the name of
an employee benefit plan or arrangement 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 or any other person acting on behalf
of any such plan or arrangement or using such plan's or
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arrangement's assets, an Opinion of Counsel satisfactory to the Servicer, the
Certificate Registrar and the Depositor (which Opinion of Counsel shall not be
an expense of the Servicer, the Certificate Registrar, the Depositor or the
Trust), and upon which the Trustee, the Depositor, the Servicer and the
Certificate Registrar shall be entitled to rely, to the effect that the
purchase and holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Depositor or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of clauses (i) and (ii) of the preceding sentence, one
of such representations shall be deemed to have been made to the Certificate
Registrar by the acceptance by a Certificate Owner of the beneficial interest
in any Class of ERISA-Restricted Certificates, unless the Certificate
Registrar shall have received from the transferee an alternative
representation or opinion acceptable in form and substance to the Servicer,
the Certificate Registrar and 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 or arrangement subject to ERISA or
to the Code 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.
(ii) No Person shall acquire an Ownership Interest in a Residual
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in
the Residual Certificate that is the subject of the proposed transfer as a
nominee, trustee or agent for any Person who is not a Permitted Transferee;
and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Residual Certificates.
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(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 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
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such Rating Agency to downgrade its rating of the Certificates and (ii) an
Opinion of Counsel to the effect that such removal will not cause any REMIC
hereunder to fail to qualify as a REMIC.
The beneficial ownership of the Class N Certificates and the Class
X Certificates shall not be transferred to a non-United States Person unless
such beneficial ownership is transferred to a non-United States Person who
will at all times be a Proportionate Holder. Neither the Class N nor the Class
X Certificates shall be pledged or used as collateral for any other obligation
if it would cause any portion of the Trust Fund to be treated as a taxable
mortgage pool under section 7701(i) of the Code. These restrictions on
transfers of Class X and Class N Certificates set forth in this Section 5.02
shall cease to apply (and the applicable portions of any legend on a Class X
or Class N Certificate may be deleted) with respect to transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of
Counsel shall not be an expense of the Trustee, the Seller or the Master
Servicer to the effect that the elimination of such restrictions will not
cause the Trust Fund to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax or tax
reporting obligation on the Trust Fund, a Certificateholder or another Person.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate and (ii) there is
delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute on behalf of the Trust, and the Certificate
Registrar shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and Percentage Interest. Upon the issuance of any new Certificate
under this Section, the Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) in connection
therewith. Any duplicate Certificate issued pursuant to this Section, shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 5.04 Persons Deemed Owners.
The Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Servicer, the Depositor, the
Certificate Registrar, any Paying Agent
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or the Trustee may treat the Person, including a Depository, in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.01 and 4.02 and for all other
purposes whatsoever, and none of the Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Sections 4.01 and 4.02 and shall
report the amounts of such distributions to the Trustee. The duties of the
Paying Agent may include the obligation (i) to withdraw funds from the
Collection Account pursuant to Section 3.05 and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly
existing under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authorities. The Paying Agent
shall initially be the Trustee. The Trustee may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor and the Rating Agencies. The Trustee as Paying Agent shall be
subject to the same standards of care, limitations on liability and rights to
indemnity as the Trustee, and the provisions of Sections 8.01, 8.02, 8.03,
8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the Paying Agent to the same
extent as they apply to the Trustee. Any Paying Agent appointed in accordance
with this Section 5.02(a) may at any time resign by giving at least 30 days'
advance written notice of resignation to the Trustee, the Servicer and the
Depositor, such resignation to become effective upon appointment of a
successor Paying Agent.
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Seller, the Servicer and the
Depositor.
The Seller and the Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Seller or Servicer, as the case may be, herein. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor.
Any entity into which the Seller, the Servicer or the Depositor
may be merged or consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Seller, the Servicer or the Depositor
shall be a party, or any corporation succeeding to the business of the Seller,
the Servicer or the Depositor, shall be the successor of the Seller, the
Servicer or the Depositor, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary
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notwithstanding; provided, however that the successor Servicer shall satisfy
all the requirements of Section 7.02 with respect to the qualifications of a
successor Servicer.
Section 6.03 Limitation on Liability of the Servicer and
Others.
Neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the Trust
or the Certificateholders for any action taken or for refraining from the
taking of any action by the Servicer in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect the Servicer or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of duties of the Servicer or by reason of its
reckless disregard of its obligations and duties of the Servicer hereunder;
provided, further, that this provision shall not be construed to entitle the
Servicer to indemnity in the event that amounts advanced by the Servicer to
retire any senior lien exceed Liquidation Proceeds (in excess of related
liquidation expenses) realized with respect to the related Mortgage Loan. The
Servicer and any director or officer or employee or agent of the Servicer may
rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Servicer and any director or officer or employee or agent of the Servicer
shall be indemnified by the Trust and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to pay
such expenses from the proceeds of the Trust or to be reimbursed therefor
pursuant to Section 3.05 upon presentation to the Trustee of documentation of
such expenses, costs and liabilities. The Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect to
any losses, expenses, costs or liabilities arising prior to such resignation
or termination (or arising from events that occurred prior to such resignation
or termination). This paragraph shall apply to the Servicer solely in its
capacity as Servicer hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or
duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities
carried on by it or its subsidiaries or Affiliates, the other activities of
the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Trustee in writing and such
proposed successor servicer is reasonably acceptable to the Trustee; and (b)
each Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor servicer stating that the proposed
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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 Servicing Fee and other compensation
payable to the Servicer pursuant hereto shall thereafter be payable to such
successor.
Section 6.05 Delegation of Duties.
(a) 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.
(b) 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 6.05(d) 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
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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.
(c) 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 6.05(d) hereof, have the right to make withdrawals from the
Collection Account pursuant to Section 3.05 hereof to reimburse previously
unreimbursed Advances and/or Servicing Advances ("Advance Reimbursement
Amounts"). Advance Reimbursement Amounts (i) shall consist solely of amounts
in respect of Advances and/or Servicing Advances for which the Servicer would
be permitted to reimburse itself in accordance with Section 3.05 hereof,
assuming the Servicer had made the related Advance(s) and/or Servicing
Advance(s) and (ii) shall not consist of amounts payable to a successor
Servicer in accordance with Section 3.05 hereof to the extent permitted under
Section 6.05(e) below.
(d) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person and the Servicer's
Assignee, shall be entitled to receive reimbursements of Advances and/or
Servicing Advances in accordance with Section 3.05 hereof, which entitlement
may be terminated by the Advance Financing Person pursuant to a written notice
to the Trustee in the manner set forth in Section 11.05 hereof. Upon receipt
of such written notice, the Servicer shall no longer be entitled to receive
reimbursement for any Advance Reimbursement Amounts and the Servicer's
Assignee shall immediately have the right to receive from the Collection
Account all Advance Reimbursement Amounts. 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 6.05 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
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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.
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's
Assignee shall have received some or all of an Advance Reimbursement Amount
related to Advances and/or Servicing Advances that were made by a Person other
than such predecessor Servicer or its related Advance Financing Person in
error, then such Servicer's Assignee shall be required to remit any portion of
such Advance Reimbursement Amount to each Person entitled to such portion of
such Advance Reimbursement Amount. Without limiting the generality of the
foregoing, the Servicer shall remain entitled to be reimbursed by the Advance
Financing Person for all Advances and/or Servicing Advances funded by the
Servicer to the extent the related Advance Reimbursement Amounts have not been
assigned or pledged to such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.07(d), any Nonrecoverable Advance referred to therein
may have been made by such Servicer or any predecessor Servicer. In making its
determination that any Advance or Servicing Advance theretofore made has
become a Nonrecoverable Advance, the Servicer shall apply the same criteria in
making such determination regardless of whether such Advance or Servicing
Advance shall have been made by the Servicer or any predecessor Servicer.
(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 6.05(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.
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ARTICLE VII
SERVICER EVENTS OF TERMINATION
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any Advance; or (B)
any other failure by the Servicer to deposit in the Collection Account
or Distribution Account any deposit required to be made under the terms
of this Agreement which continues unremedied for a period of one
Business Day after the date upon which written notice of such failure
shall have been given to the Servicer by the Trustee or by any Holder of
a Regular Certificate evidencing at least 25% of the Voting Rights; or
(ii) The failure by the Servicer to make any required Servicing
Advance which failure continues unremedied for a period of 30 days, or
the failure by the Servicer duly to observe or perform, in any material
respect, any other covenants, obligations or agreements of the Servicer
as set forth in this Agreement, which failure continues unremedied for a
period of 30 days, after the date (A) on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or by any Holder of a Regular Certificate
evidencing at least 25% of the Voting Rights or (B) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for a
period of 60 days; or
(iv) The Servicer shall voluntarily go into liquidation, consent
to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property; or a decree
or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations; or
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(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
------------------------------ ----------
February 2007 through January 2008 N/A
February 2008 through January 2009 4.00%
February 2009 through January 2010 5.85%
February 2010 through January 2011 7.65%
February 2011 through January 2012 8.60%
February 2012 and thereafter 9.00%
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following
the Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a
successor servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Servicer and (y) in the case of (i)(B), (ii), (iii), (iv) and
(v) above, the Trustee shall, at the direction of the Holders of each Class of
Regular Certificates evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Servicer (and to the Trustee if
given by Holders of Certificates), terminate all of the rights and obligations
of the Servicer as servicer under this Agreement. Any such notice to the
Servicer shall also be given to each Rating Agency, the Depositor and the
Seller. On or after the receipt by the Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Certificates or the Mortgage Loans or otherwise, shall pass to and be vested
in the Trustee pursuant to and under this Section; and, without limitation,
the Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and Related Documents or otherwise. The Servicer agrees to cooperate with
the Trustee (or the applicable successor Servicer) in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the delivery to the successor Servicer of all
documents and records requested by it to enable it to assume the Servicer's
functions under this Agreement within ten Business Days subsequent to such
notice, the transfer within one Business Day subsequent to such notice to the
Trustee (or the applicable successor Servicer) for the administration by it of
all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the servicing to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
shall be paid by the
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predecessor Servicer (or if the predecessor Servicer is the Trustee, the
initial Servicer) upon presentation of reasonable documentation of such costs
and expenses.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer and the Trustee
receives a notice of termination pursuant to Section 7.01 or 6.04, the Trustee
(or such other successor Servicer as is approved in accordance with this
Agreement) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof arising on and after its succession. As compensation
therefor, the Trustee (or such other successor Servicer) shall be entitled to
such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the above, (i) if
the Trustee is unwilling to act as successor Servicer or (ii) if the Trustee
is legally unable so to act, the Trustee shall appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer having a
net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, however, 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.
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.
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(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.
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
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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 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
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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 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;
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(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 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
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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 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,
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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.
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
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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 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.
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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
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
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(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, 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
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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.
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall make or cause to be made REMIC elections for
each REMIC designated as such in the Preliminary Statement on Forms 1066 or
other appropriate federal tax or information return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. The regular interests and residual interest in each REMIC shall be as
designated in the Preliminary Statement.
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(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Servicer in fulfilling its
duties hereunder. The Servicer shall be entitled to reimbursement of expenses
to the extent provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, 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 Certificates with respect to each
REMIC holding the largest Percentage Interest shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person") with
respect to the applicable REMIC or REMICs, and the Trustee is irrevocably
designated as and shall act as attorney-in-fact and agent for such Tax Matters
Person for each REMIC. The Trustee, as agent for the Tax Matters Person, shall
perform, on behalf of each REMIC, all reporting and other tax compliance
duties that are the responsibility of such REMIC under the Code, the REMIC
Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties, if
required by the Code, the REMIC Provisions, or other such guidance, the
Trustee, as agent for the Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate
to any disqualified person or organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Servicer, and the Holders of Certificates
shall take any action or cause any REMIC to take any action necessary to
create or maintain the status of such REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status. Neither the Trustee, the Servicer, nor the Holder of any Residual
Certificate shall take any action or cause any REMIC to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon
such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless such action or failure to act is expressly permitted under the
terms of this Agreement or the Trustee and the Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such status or
result in the imposition of such a tax. In addition, prior to taking any
action with respect to any REMIC or the assets therein, or causing such REMIC
to take any action, which is not expressly permitted under the terms of this
Agreement, any Holder of a Residual Certificate will consult with the
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Trustee and the Servicer, or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur
with respect to such REMIC, and no such Person shall take any such action or
cause such REMIC to take any such action as to which the Trustee or the
Servicer has advised it in writing that an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due its
pro rata share of any and all taxes imposed on any REMIC by federal or state
governmental authorities. To the extent that such REMIC taxes are not paid by
Residual Certificateholders, the Trustee shall pay any remaining REMIC taxes
out of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in each REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to Holders of the REMIC Regular Interests or the
Certificates, as the case may be.
(h) The Trustee, shall, for federal income tax purposes, maintain
or cause to be maintained books and records with respect to each REMIC on a
calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 2006,
the Servicer shall deliver to the Trustee and each Rating Agency an Officer's
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.
(l) The Trustee shall treat the rights of each Class of
Certificates entitled to receive Net Rate Carryover Amounts as rights in
interest rate cap contracts written by the Holders of the Class N and Class X
Certificates in favor of the Holders of the such Classes of Certificates, and
the Trustee shall account for such as property held separate and apart from
the regular interests it holds in each of the REMICs created hereunder. This
provision is intended to satisfy the requirements of Treasury Regulations
Section 1.860G-2(i) for the treatment of property rights coupled with regular
interests to be separately respected and shall be interpreted consistent with
such regulation. On each Distribution Date, to the extent that any such
Certificates receive interest in excess of the applicable Net Rate Cap, such
interest will be treated as distributed to the Class N and Class X
Certificates in respect of interest on the Class X Interest and then paid to
the respective Class Certificates entitled to Net Rate Carryover Amounts
pursuant to the related interest rate cap agreement.
(m) [Reserved]
(n) In the event that any Person holds pro rata shares of the
ownership of the Class N Certificates and the Class X Certificates (any such
Person, a "Proportionate Holder"), the Trustee shall treat such Person as the
holder of the ownership of the same pro-rata share of the Class X 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
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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 interests in any REMIC created hereunder. By
acquiring the Class N Certificates and the Class X Certificates, the
respective Holders will agree to treat the Class N Certificates and the Class
X Certificates in the manner described in the preceding sentences for federal
income tax purposes. In such event, (i) a separate capital account shall be
established and maintained for each Holder of a Class N or Class X Certificate
in accordance with Treasury Regulation 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 Prepayment Charges (including amounts
in connection with the full or partial waiver of such Prepayment Charge
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 Net Rate
Carryover Amounts, and shall be allocated expense in respect of any actual
payment of such Net Rate Carryover Amounts based on which one of such Classes
economically bears such expense, (v) the Class X Certificates shall be
allocated all remaining income and any expenses and Realized Losses with
respect to the Class X Interest, until the capital account of the Class X
Certificates is reduced to zero, and any remaining expenses or losses shall be
allocated to the Class N Certificates, (vi) neither the Class N Certificates
nor the Class X Certificates shall be responsible for restoring any deficit to
its capital account, (vii) upon termination of the Trust Fund pursuant to
Article X, all amounts available for distribution to Holders of the Class N
and Class X Certificates shall be distributed in accordance with their
positive capital account balances, first to the Class N Certificates until
their Notional Amount and any accrued but unpaid interest thereon are reduced
to zero, and then to the Class X Certificates, and (viii) the Trustee shall
maintain books and records with respect to the partnership on a calendar year
basis (unless a different taxable year shall be required by the Code) and
shall prepare or cause to be prepared, and cause the Holder of the largest
Percentage Interest of the Class X Certificates to sign and file or cause to
be filed all federal and state tax and information returns for the
partnership, and shall furnish or cause to be furnished Schedule K-1's to the
Holders of the Class N and Class X Certificates at the time required by the
Code. Unless otherwise directed by a majority of the Percentage Interests of
the Class X and Class N Certificates, the Trustee shall not make an election
under Section 754 of the Code. The Holder of the largest Percentage Interest
of the Class X Certificates, by acceptance of its Class X Certificate, agrees
to act as "tax matters partner" (within the meaning of Section 6231(a)(7) of
the Code and to sign and timely file all federal and state partnership tax and
information returns prepared by the Trustee pursuant to this Section 9.01(n).
(o) The Trustee shall treat the Basis Risk Reserve Fund as outside
reserve funds within the meaning of Treasury Regulation 1.860G-2(h) that are
owned by the Class N and Class X Certificateholders and that are not assets of
the REMICs. The Trustee shall treat the rights of
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the Class AV Certificates and the Subordinated Certificates to receive
payments from the Basis Risk Reserve Fund as rights in interest rate cap
contracts written by the Holders of the Class X Interest (in the case of
amounts payable from the Basis Risk Reserve Fund)in favor of the the Class AV
Certificateholders and the Subordinated Certificateholders. Thus, each
Certificate other than the Class N and Class X Certificates shall be treated
as representing ownership of not only REMIC Regular Interests, but also
ownership of an interest in one or more interest rate cap contracts.
Section 9.02 Prohibited Transactions and Activities.
Neither the Seller, the Depositor, the Servicer nor the Trustee
shall sell, dispose of, or substitute for any of the Mortgage Loans, except in
a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of
any investments in the Distribution Account for gain, nor accept any
contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of such
REMIC as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of
the assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause such REMIC to be subject to a tax
on prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes
and Loss of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as
a result of a prohibited transaction or prohibited contribution under the
REMIC Provisions due to the negligent performance by the Servicer of its
duties and obligations set forth herein, the Servicer shall indemnify the
Holder of the related Residual Certificate against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
provided, however, that the Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Servicer have
any liability (1) for any action or omission that is taken in accordance with
and in compliance with the express terms of, or which is expressly permitted
by the terms of, this Agreement, (2) for any Losses other than arising out of
a negligent performance by the Servicer of its duties and obligations set
forth herein, and (3) for any special or consequential damages to
Certificateholders (in addition to payment of principal and interest on the
Certificates).
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ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Seller,
the Servicer, the Depositor, the Trustee and the Certificate Registrar (other
than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate
upon notice to the Trustee upon the earliest of (i) the Distribution Date on
which the Certificate Principal Balance of each Class of Certificates has been
reduced to zero, (ii) the final payment or other liquidation of the last
Mortgage Loan in the Trust, and (iii) the optional purchase by the Servicer 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. James's, 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 Certificates on
the next succeeding Distribution Date upon which the aggregate current Pool
Balance is less than or equal to 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.
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
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Certificates will be made upon presentation and surrender of such Certificates
at the office or agency of the Trustee therein designated, (2) the amount of
any such final distribution and (3) that the Record Date otherwise applicable
to such Distribution Date is not applicable, distributions being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the Certificates on
the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Class and to the extent that funds
are available for such purpose, an amount equal to the amount required to be
distributed to such Holders in accordance with the provisions of Sections 4.01
and 4.02 for such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for
the benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any
other case) shall give a second written notice to the remaining
Certificateholders, to surrender their Certificates for cancellation and
receive the final distribution with respect thereto. If within nine months
after the second notice all the Certificates shall not have been surrendered
for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets which remain subject hereto (except with
respect to the Class M-6, Class N and Class X Certificates and the assets of
the Class M-6 REMIC and the Class X REMIC) and the Trustee upon transfer of
such funds shall be discharged of any responsibility for such funds, and such
Certificateholders shall look to the Class R Certificateholders for payment.
The Class XR Certificateholders shall be entitled to all unclaimed funds and
other assets with respect to the Class M-6 REMIC and the Class X REMIC.
Holders of the Class M-6 Certificates (representing beneficial ownership of
the Class M-6 Regular Interest) and Class N and Class X Certificates
(representing partners in a partnership which beneficially owns the Class X
REMIC Regular Interest) shall be entitled to look only to the Class XR
Certificateholder for payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the Servicer exercises its purchase option
as provided in Section 10.01, the Trust shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section will not (i) result in
the imposition of taxes on "prohibited transactions" of the Trust as defined
in Section 860F of the Code or (ii) cause any REMIC constituting part of the
Trust Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) The Trustee shall designate a date within 90 days prior to the
final Distribution Date as the date of adoption of plans of complete
liquidation of each of the Master REMIC, the Intermediate REMIC, the
Subsidiary REMIC, the Class M-6 REMIC
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and the Class X REMIC and shall specify such date in the final federal
income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust to the Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited in the following order of priority (A) (i) to
the Holders of each of the Class AV and Class AF Certificates, pro rata,
(ii) to the Subordinate Certificates, the related Certificate Principal
Balance, as applicable, plus one month's interest thereon at the
applicable Pass-Through Rate and (iii) to pay any remaining Net Rate
Carryover Amounts that have not yet been paid, (B) to the Class N and
Class X Certificates in respect of the Class X Interest, the amount of
any remaining Monthly Excess Cash Flow Amounts not previously
distributed thereon, (C) to the remaining REMIC Regular Interests the
amounts allocable thereto pursuant to Section 4.08 and (D) to the Class
R Certificateholders, all cash on hand in respect of the related REMIC
or REMICs after such payment (other than cash retained to meet claims)
and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Trustee as their attorney in fact to: (i)
designate such date of adoption of plans of complete liquidation and (ii) to
take such other action in connection therewith as may be reasonably required
to carry out such plans of complete liquidation all in accordance with the
terms hereof.
(c) Notwithstanding any other provision of this Agreement, the
Class M-6 REMIC will terminate on the last Distribution Date on which the
Class M-6 Certificates, respectively, are entitled to distributions pursuant
to this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Seller, the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be defective or inconsistent with any other
provisions herein, (iii) amend the provisions of the Advance Facility pursuant
to Section 6.05 hereof 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 (iii) above shall not adversely
affect in any respect the interests of any Certificateholder, as evidenced by
(i) notice in writing to the Depositor, the Servicer and the Trustee from the
Rating Agencies that such action will not result in the reduction or
withdrawal of the rating of any outstanding Class
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of Certificates with respect to which it is a Rating Agency, or (ii) an
Opinion of Counsel delivered to the Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by
Seller, the Depositor, the Servicer and the Trustee, with the consent of the
Majority Certificateholders for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment or waiver shall (x) reduce in any
manner the amount of, or delay the timing of, payments on the Certificates
which are required to be made on any Certificate without the consent of the
Holder of such Certificate, (y) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than
as described in clause (x) above, without the consent of the Holders of
Certificates of such Class evidencing at least a 66% Percentage Interest in
such Class, or (z) reduce the percentage of Voting Rights required by clause
(y) above without the consent of the Holders of all Certificates of such Class
then outstanding. Upon approval of an amendment, a copy of such amendment
shall be sent to the Rating Agencies. Prior to the execution of any amendment
to this Agreement, the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel (at the expense of the Person seeking such amendment)
stating that the execution of such amendment is authorized or permitted by
this Agreement. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement.
Notwithstanding any provision of this Agreement to the contrary,
the Trustee shall not consent to any amendment to this Agreement unless it
shall have first received an Opinion of Counsel, delivered by (and at the
expense of) the Person seeking such Amendment, to the effect that such
amendment will not result in the imposition of a tax on any REMIC constituting
part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC
constituting part of the Trust to fail to qualify as a REMIC at any time that
any Certificates are outstanding and that the amendment is being made in
accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee
shall furnish, at the expense of the Person that requested the amendment if
such Person is the Seller or the Servicer (but in no event at the expense of
the Trustee), otherwise at the expense of the Trust, a copy of such amendment
and the Opinion of Counsel referred to in the immediately preceding paragraph
to the Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Section 11.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are
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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.
-132-
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of
the State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to
any claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of
or relating hereto brought in any such courts, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in any inconvenient forum and further irrevocably waives the right to
object, with respect to such claim, suit, action or proceeding brought in any
such court, that such court does not have jurisdiction over such party,
provided that service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by first class mail, postage prepaid, or by express delivery service,
to (a) in the case of the Seller, Credit-Based Asset Servicing and
Securitization LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx,
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 and 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--Bond Securitization,
L.L.C., Series 2005-CB1, 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, Bond Securitization, L.L.C., 0 Xxxx Xxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2005-CB1, 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,
-133-
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 11.07 Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies.
(a) Each of the Trustee and the Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or the Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) the resignation or termination of the Servicer or the
Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(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; Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, 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
-134-
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage
Surveillance Group.
Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have
been provided reasonable security or indemnity against their out-of-pocket
expenses (including reasonable attorneys' fees) to be incurred in connection
therewith.
Section 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or
taken by the Certificateholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such
Certificateholders in person or by agent duly appointed in writing; and such
action shall become effective when such instrument or instruments are
delivered to the Trustee, the Seller and the Servicer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "act" of the Certificateholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing 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.
-135-
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.
BOND SECURITIZATION, L.L.C., as
Depositor
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: 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
-136-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 8th day of February, 2005 before me, a notary public in and
for said State, personally appeared Xxxx X. Xxxxx, known to me to be a
Vice President of Bond Securitization, L.L.C., 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
company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxx Xxxxxxx
---------------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 8th day of February, 2005 before me, a notary public in and
for said State, personally appeared Xxxxxxxxx Parvero, known to me to be the
Vice President of Credit-Based Asset Servicing and Securitization LLC, a
limited liability company that executed the within instrument, and also known
to me to be the person who executed it on behalf of said limited liability
company, and acknowledged to me that such limited liability company executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxx
---------------------------------------
[SEAL]
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 8th day of February, 2005 before me, a notary public in and
for said State, personally appeared X. Xxxxxxxxxxxxxx, known to me to be the
Vice President of US Bank National Association, a national banking corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
[SEAL]
Notary Public
STATE OF TEXAS )
) ss.:
COUNTY OF XXXXXX )
On the 8th day of February, 2005 before me, a notary public in and
for said State, personally appeared Xxxxxx XxXxxxx, known to me to be the Sr.
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.
/s/ X. Xxxxxx
---------------------------------------
[SEAL]
Notary Public
EXHIBIT A-1
[FORM OF CLASS AV-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $161,180,000
Original Class Certificate
Principal Balance of this
Class : $161,180,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : AV-1
Assumed Maturity Date : January 25, 2035
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AV-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AV-1 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AV-1 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AV-1 Certificate (obtained by dividing the
Denomination of this Class AV-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AV-1
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AV-1
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AV-1
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AV-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AV-1 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AV-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT A-2
[FORM OF CLASS AV-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $81,247,000
Original Class Certificate
Principal Balance of this
Class : $81,247,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : AV-2
Assumed Maturity Date : January 25, 2035
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AV-2
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AV-2 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AV-2 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AV-2 Certificate (obtained by dividing the
Denomination of this Class AV-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AV-2
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AV-2
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AV-2
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AV-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AV-2 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AV-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ________________________, or, if mailed by check, to
_____________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________.
This information is provided by _________________________________________,
the assignee named above, or _________________________________________________,
as its agent.
7
EXHIBIT A-3
[FORM OF CLASS AV-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $6,373,000
Original Class Certificate
Principal Balance of this
Class : $6,373,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : AV-3
Assumed Maturity Date : January 25, 2035
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AV-3
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AV-3 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AV-3 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AV-3 Certificate (obtained by dividing the
Denomination of this Class AV-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AV-3
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AV-3
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AV-3
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AV-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AV-3 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AV-3 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated: _____________
____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
_____________________________________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT A-4
[FORM OF CLASS AF-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $40,230,000
Original Class Certificate
Principal Balance of this
Class : $40,230,000
Percentage Interest : 100%
Pass-Through Rate : 3.686%
CUSIP : [o]
Class : AF-1
Assumed Maturity Date : January 25, 2035
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AF-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect
to the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AF-1 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AF-1 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AF-1 Certificate (obtained by dividing the
Denomination of this Class AF-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AF-1
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AF-1
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AF-1
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AF-1 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AF-1 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AF-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
_____________________________________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT A-5
[FORM OF CLASS AF-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $14,120,000
Original Class Certificate
Principal Balance of this
Class : $14,120,000
Percentage Interest : 100%
Pass-Through Rate : 4.090%
CUSIP : [o]
Class : AF-2
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AF-2
evidencing the Percentage Interest in the distributions
allocable to the Certificates of the above-referenced Class
with respect to the Trust consisting of first and second lien
mortgage loans (the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AF-2 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AF-2 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AF-2 Certificate (obtained by dividing the
Denomination of this Class AF-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AF-2
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AF-2
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AF-2
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AF-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AF-2 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AF-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
_____________________________________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT A-6
[FORM OF CLASS AF-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $11,533,000
Original Class Certificate
Principal Balance of this
Class : $11,533,000
Percentage Interest : 100%
Pass-Through Rate : 4.974%
CUSIP : [o]
Class : AF-3
Assumed Maturity Date : January 25, 2035
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AF-3
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AF-3 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AF-3 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AF-3 Certificate (obtained by dividing the
Denomination of this Class AF-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AF-3
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AF-3
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AF-3
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AF-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AF-3 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AF-3 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated: _____________
____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
_____________________________________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT A-7
[FORM OF CLASS AF-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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $7,320,000
Original Class Certificate
Principal Balance of this
Class : $7,320,000
Percentage Interest : 100%
Pass-Through Rate : 4.615%
CUSIP : [o]
Class : AF-4
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class AF-4
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class
AF-4 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class AF-4 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class AF-4 Certificate (obtained by dividing the
Denomination of this Class AF-4 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class AF-4
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class AF-4
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Class AF-4
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class AF-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class AF-4 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class AF-4 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________.
Dated: _____________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of __________________________________________________________,
account number ___________________, or, if mailed by check, to ______________
_____________________________________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by ________________________________________.
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT B-1
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS M-1 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3 AND CLASS AF-4 CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $26,851,000
Original Class Certificate
Principal Balance of this
Class : $26,851,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : M-1
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class M-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, or the Trustee referred
to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class M-1 Certificate (obtained by dividing the
Denomination of this Class M-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class M-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By ______________________________________
This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class M-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)__________________________________
_____________________________________________________________________________
a Percentage Interest evidenced by the within and hereby authorize(s) the
registration of transfer of such interest to assignee on the Certificate
Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of ________________________, account number _________________,
or, if mailed by check, to ___________________________________________________
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________.
This information is provided by _____________________________________________,
the assignee named above, or ________________________________________________,
as its agent.
8
EXHIBIT B-2
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS M-2 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4 AND CLASS M-1
CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $20,702,000
Original Class Certificate
Principal Balance of this
Class : $20,702,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : M-2
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class M-2
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
M-2 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, or the Trustee referred
to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class M-2 Certificate (obtained by dividing the
Denomination of this Class M-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-2 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class M-2 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class M-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
________________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of ___________________, account number ______________________,
or, if mailed by check, to __________________________________________________
Applicable statements should be mailed to ___________________________________
This information is provided by _____________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT B-3
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS M-3 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1 AND CLASS M-2
CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination" : $6,354,000
Original Class Certificate
Principal Balance of this
Class : $6,354,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : M-3
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class M-3
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance of this
Class M-3 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class M-3 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class M-3 Certificate (obtained by dividing the
Denomination of this Class M-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class M-3 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class M-3 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class M-3 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class M-3 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
5
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) ____________________________________
________________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________
_____________________________________________________________________________
for the account of ___________________, account number ______________________,
or, if mailed by check, to __________________________________________________
Applicable statements should be mailed to ___________________________________
This information is provided by _____________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT C-1
[FORM OF CLASS B-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS B-1 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1, CLASS M-2 AND
CLASS M-3 CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A TRANSFEREE WHO DOES
NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION LETTER, AS DESCRIBED
ABOVE, WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS, AS
APPROPRIATE. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $5,534,000
Original Class Certificate
Principal Balance of this
Class : $5,534,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : 09788R AE 9
Class : B-1
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class B-1
evidencing the Percentage Interest in the distributions allocable
to the Certificates of the above-referenced Class with respect to
the Trust consisting of first and second lien mortgage loans
(the "Mortgage Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance of this Class
B-1 Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class B-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, or the Trustee referred
to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class B-1 Certificate (obtained by dividing the
Denomination of this Class B-1 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-1 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class B-1 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-1
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class B-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but solely
as Trustee
By _____________________________________
This is one of the Class B-1 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class B-1 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) ___________________________________
_______________________________________________________________________________
a Percentage Interest equal to ____% evidenced by the within Asset-Backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named
assignee and deliver such Certificate to the following address:
_______________________________________________________________________________.
Dated:
___________________________________
Signature by or on behalf of assignor
___________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
for the account of ________________________, account number ___________________
or, if mailed by check, to ____________________________________________________
Applicable statements should be mailed to _____________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
8
EXHIBIT C-2
[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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS B-2 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1, CLASS M-2,
CLASS M-3 AND CLASS B-1 CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED
HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A TRANSFEREE WHO DOES
NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION LETTER, AS DESCRIBED
ABOVE, WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS, AS
APPROPRIATE. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE
WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $5,124,000
Original Class Certificate
Principal Balance of this
Class : $5,124,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : B-2
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class B-2
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance of this
Class B-2 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class B-2 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class B-2 Certificate (obtained by dividing the
Denomination of this Class B-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-2 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class B-2 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-2
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class B-2 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class B-2 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class B-2 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:____________________________________
______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
for the account of ____________________________, account number _____________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
his information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT C-3
[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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS B-3 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1, CLASS M-2,
CLASS M-3, CLASS B-1 AND CLASS B-2 CERTIFICATES OF THIS SERIES TO THE EXTENT
DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A TRANSFEREE WHO DOES
NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION LETTER, AS DESCRIBED
ABOVE, WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS, AS
APPROPRIATE. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE
WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $4,714,000
Original Class Certificate
Principal Balance of this
Class : $4,714,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : B-3
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class B-3
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance of this
Class B-3 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class B-3 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class B-3 Certificate (obtained by dividing the
Denomination of this Class B-3 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-3 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class B-3 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-3
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class B-3 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By __________________________________
This is one of the Class B-3 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class B-3 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:____________________________________
______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
for the account of ____________________________, account number _____________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
his information is provided by ______________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT C-4
[FORM OF CLASS B-4 CERTIFICATE]
THE CLASS B-4 CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS B-4 CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS B-4 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1, CLASS M-2,
CLASS M-3, CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES OF THIS SERIES TO
THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A TRANSFEREE WHO DOES
NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION LETTER, AS DESCRIBED
ABOVE, WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS, AS
APPROPRIATE. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE
WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $5,534,000
Original Class Certificate
Principal Balance of this
Class : $5,534,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : B-4
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class B-4
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance of this
Class B-4 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class B-4 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class B-4 Certificate (obtained by dividing the
Denomination of this Class B-4 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-4 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class B-4 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-4
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class B-4 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By ________________________________
This is one of the Class B-4 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class B-4 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: ___________________________________
______________________________________________________________________________
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
for the account of ____________________________, account number _____________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by _____________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT C-5
[FORM OF CLASS B-5 CERTIFICATE]
THE CLASS B-5 CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS B-5 CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE").
THIS CLASS B-5 CERTIFICATE IS SUBORDINATE TO THE CLASS AV-1, CLASS AV-2, CLASS
AV-3, CLASS AF-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS M-1, CLASS M-2,
CLASS M-3, CLASS B-1, CLASS B-2, CLASS B-3 AND CLASS B-4 CERTIFICATES OF THIS
SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING CERTIFICATES
WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A TRANSFEREE WHO DOES
NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION LETTER, AS DESCRIBED
ABOVE, WILL BE DEEMED TO HAVE MADE ONE OF THE FOREGOING REPRESENTATIONS, AS
APPROPRIATE. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE
WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Initial Certificate Principal
Balance of this Certificate
("Denomination") : $4,099,000
Original Class Certificate
Principal Balance of this
Class : $4,099,000
Percentage Interest : 100%
Pass-Through Rate : Variable
CUSIP : [o]
Class : B-5
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class B-5
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance of this
Class B-5 Certificate at any time may be less than the Initial Certificate
Principal Balance set forth on the face hereof, as described herein. This
Class B-5 Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Servicer, or the
Trustee referred to below or any of their respective affiliates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Class B-5 Certificate (obtained by dividing the
Denomination of this Class B-5 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Bond Securitization,
L.L.C. (the "Depositor"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller (the "Seller"), Xxxxxx Loan Servicing LP, as
Servicer (the "Servicer"), and U.S. Bank National Association, as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Class B-5 Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class B-5 Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this Class B-5
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class B-5 Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _________________________________
This is one of the Class B-5 Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class B-5 Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) __________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:____________________________________
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
for the account of ____________________________, account number _____________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by _____________________________________________,
the assignee named above, or __________________________________, as its agent.
8
EXHIBIT C-6
[FORM OF CLASS N CERTIFICATE]
THE CLASS N CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS N CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OTHER CLASSES OF
CERTIFICATES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS N CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 4975 OF THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH
TRANSFER, OR THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING
CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL 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 SECTION I AND III OF PTCE 95-60, OR AN OPINION OF COUNSEL IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. A
TRANSFEREE WHO DOES NOT DELIVER AN OPINION OF COUNSEL OR A REPRESENTATION
LETTER, AS DESCRIBED ABOVE, WILL BE DEEMED TO HAVE
MADE ONE OF THE FOREGOING REPRESENTATIONS, AS APPROPRIATE. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO
SECTION 4975 OF THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Percentage Interest : 100%
Pass-Through Rate : Variable
Class : N
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class N
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
This Class N Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that NIM I LLC is the registered owner of the Percentage
Interest evidenced by this Class N Certificate in certain monthly
distributions with respect to a Trust consisting primarily of the Mortgage
Loans deposited by Bond Securitization, L.L.C. (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among the Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
Xxxxxx Loan Servicing LP, as Servicer (the "Servicer"), and U.S. Bank National
Association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Class N Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class N Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class N
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class N Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By __________________________________
This is one of the Class N Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class N Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee) ________________________________
______________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address: __________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
______________________________________________________________________________
for the account of ___________________________, account number ______________,
or, if mailed by check, to __________________________________________________.
Applicable statements should be mailed to ____________________________________
This information is provided by _______________________________, the assignee
named above, or ________________ ________________________, as its agent.
8
EXHIBIT C-7
[FORM OF CLASS X CERTIFICATE]
THE CLASS X CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS X CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES TO
THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE
WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION
THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 4975 OF THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH
TRANSFER, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE WITHOUT
THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE
VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : January 1, 2005
First Distribution Date : February 25, 2005
Percentage Interest : 100%
Pass-Through Rate : Variable
Class : X
Assumed Maturity Date : January 25, 2035
2
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class X
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
This Class X Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that NIM I LLC is the registered owner of the Percentage
Interest evidenced by this Class X Certificate in certain monthly
distributions with respect to a Trust consisting primarily of the Mortgage
Loans deposited by Bond Securitization, L.L.C. (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among the Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
Xxxxxx Loan Servicing LP, as Servicer (the "Servicer"), and U.S. Bank National
Association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Class X Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class X Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class X
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class X Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
3
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By _____________________________________
This is one of the Class X Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
4
[Reverse of Class X Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon
5
this Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ____________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and\
Taxpayer Identification Number of assignee) ________________________________
_____________________________________________________________________________
a Percentage Interest evidenced by the within Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Trustee to issue a new Certificate of a
like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:____________________________________.
Dated:
__________________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
______________________________________________________________________________
for the account of __________________________, account number _______________,
or, if mailed by check, to ___________________________________________________
Applicable statements should be mailed to ____________________________________
This information is provided by ______________________________, the assignee
named above, or __________________________________, as its agent.
8
EXHIBIT C-8
[FORM OF CLASS XR CERTIFICATE]
THE CLASS XR CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS XR CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS XR CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. 1
Percentage Interest: 100%
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class XR
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
This Class XR Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that XXXX X. XXXXXXX is the registered owner of the
Percentage Interest evidenced by this Class XR Certificate in certain monthly
distributions with respect to a Trust consisting primarily of the Mortgage
Loans deposited by Bond Securitization, L.L.C. (the "Depositor"). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among the Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
Xxxxxx Loan Servicing LP, as Servicer (the "Servicer"), and U.S. Bank National
Association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Class XR Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class XR Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class XR
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class XR Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By __________________________________
This is one of the Class XR Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class XR Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and
4
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
Dated: _____________
________________________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________
______________________________________________________________________________
for the account of___________________________, account number _______________,
or, if mailed by check, to ___________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
_____________________________________________________________________________.
This information is provided by _______________________________________,
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT C-9
[FORM OF CLASS R CERTIFICATE]
THE CLASS X CERTIFICATES WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
OTHER JURISDICTION. THIS CLASS X CERTIFICATE MAY BE TRANSFERRED ONLY TO
"QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE ACT
IN COMPLIANCE WITH SUCH RULE 144A OR TO INSTITUTIONAL INVESTORS THAT ARE
"ACCREDITED INVESTORS" (AS DEFINED IN CLAUSES (1), (2), (3) and (7) OF RULE
501(a) OF REGULATION D UNDER THE ACT), IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT, SUBJECT IN EACH CASE TO THE REQUIREMENTS
SET FORTH IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE CERTIFICATE REGISTRAR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF
THE CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER, OR
AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. 1
Percentage Interest: 100%
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
Class R
evidencing the Percentage Interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to the Trust
consisting of first and second lien mortgage loans (the "Mortgage
Loans")
BOND SECURITIZATION, L.L.C., as Depositor
This Class R Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicer,
or the Trustee referred to below or any of their respective affiliates.
This certifies that RESIDUAL INTEREST INVESTMNETS, LP is the registered
owner of the Percentage Interest evidenced by this Class R Certificate in
certain monthly distributions with respect to a Trust consisting primarily of
the Mortgage Loans deposited by Bond Securitization, L.L.C. (the "Depositor").
The Trust was created pursuant to a Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among the Depositor,
Credit-Based Asset Servicing and Securitization LLC, as Seller (the "Seller"),
Xxxxxx Loan Servicing LP, as Servicer (the "Servicer"), and U.S. Bank National
Association, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Class R Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Class R Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Class R
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Class R Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
2
IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.
Dated: February __, 2005
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity, but
solely as Trustee
By ___________________________________
This is one of the Class R Certificates
referenced in the within-mentioned Agreement
By ________________________________
Authorized Signatory of
U.S. Bank National Association, as Trustee
3
[Reverse of Class R Certificate]
C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2005-CB1
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB1
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day then the
first Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or, upon the request of a Certificateholder owning
Regular Certificates of a Class having Denominations aggregating at least
$5,000,000, by wire transfer or otherwise, as set forth in the Agreement. The
final distribution on each Certificate will be made in like manner, but only
upon presentment and surrender of such Certificate at the office or agency of
the Trustee specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Seller, the Servicer and the Trustee with the
consent of Holders of the requisite percentage of the Percentage Interests of
each Class of Certificates affected by such amendment, as specified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and
4
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the office or agency maintained by the Trustee in New York, New York
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, Trustee and the Certificate
Registrar and any agent of the Depositor, the Servicer, the Seller, Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Depositor,
Servicer, the Seller, the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
On any Distribution Date following the date at which the Pool Balance is
equal to or less than 10% of the Pool Balance as of the Cut-off Date, the
Servicer (or one of its Affiliates) may purchase, in whole, from the Trust the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero and (ii) the final payment or
other liquidation of the last Mortgage Loan in the Trust. In no event,
however, will the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
living at the date of the Agreement of a certain person named in the
Agreement.
Capitalized terms used herein that are defined in the Agreement shall
have the meanings ascribed to them in the Agreement, and nothing herein shall
be deemed inconsistent with that meaning.
5
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address: ________________________________________
Dated: _____________
_______________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________
______________________________________________________________________________
for the account of___________________________________________________________,
account number ____________________, or, if mailed by check, to ______________
______________________________________________________________________________
Applicable statements should be mailed to ____________________________________
_____________________________________________________________________________.
This information is provided by _______________________________________,
the assignee named above, or ________________________________________________,
as its agent.
7
EXHIBIT D
MORTGAGE LOAN SCHEDULE
ON FILE WITH TRUSTEE
D-1
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
Attn: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
Re: Pooling and Servicing Agreement dated as of January 1, 2005 among
Bond Securitization, L.L.C., 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.)
E-1
_____ 5. Nonliquidation Reason:_______________________
By:_____________________
(authorized signer)
Issuer:_______________________
Address:________________
________________________
Date:___________________
Custodian
---------
The Bank of New York
Please acknowledge the execution of the above request by your signature and
date below:
_______________________________ ___________________________
Signature Date
Documents returned to Custodian:
_______________________________ ___________________________
Custodian Date
E-2
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
[Date]
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of January 1, 2005 among Bond
Securitization, L.L.C., 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 with respect to Bond Securitization
Asset- Backed Certificates, Series 2005-CB1
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that it received
confirmation from the Custodian that the Custodian has received the documents
listed in Section 2.01 of the Pooling and Servicing Agreement for each
Mortgage File pertaining to each Mortgage Loan listed on Schedule A, to the
Pooling and Servicing Agreement, subject to any exceptions noted on Schedule I
hereto.
Capitalized words and phrases used herein and not otherwise
defined herein shall have the respective meanings assigned to them in the
Pooling and Servicing Agreement. This Certificate is subject in all respects
to the terms of Section 2.02 of the Pooling and Servicing Agreement and the
Pooling and Servicing Agreement sections cross-referenced therein.
U.S. BANK NATIONAL ASSOCIATION as
Trustee
By:____________________________________
Name:
Title:
F-1-1
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of January 1, 2005 among Bond
Securitization, L.L.C., 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 with respect to C-BASS Mortgage
Asset-Backed Certificates, Series 2005-CB1
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on Schedule I hereto) it received confirmation
from the Custodian that the Custodian has received the applicable documents
listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION as
Trustee
By:____________________________________
Name:
Title:
F-2-1
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Asset-Backed Certificates,
Series 2005-CB1
------------------------------------------
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of January 1, 2005, among Bond Securitization, L.L.C., 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 (the
"Trustee"), we hereby acknowledge the receipt of the original Mortgage Note (a
copy of which is attached hereto as Exhibit 1) with any exceptions thereto
listed on Exhibit 2.
U.S. BANK NATIONAL ASSOCIATION as
Trustee
By:___________________________________
Name:
Title:
F-3-1
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
SEE TAB 7
G-1
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to
administer oaths, ______________________ who first being duly sworn deposes
and says: Deponent is ______________________ of
______________________________, successor by merger to
_________________________________________ ("Seller") and who has personal
knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown
and is presently lost and unavailable after diligent search has been made.
Seller's records show that an amount of principal and interest on said note is
still presently outstanding, due, and unpaid, and Seller is still owner and
holder in due course of said lost note.
Seller executes this Affidavit for the purpose of inducing U.S.
Bank National Association, as trustee on behalf of C-BASS Mortgage
Asset-Backed Certificates, Series 2005-CB1, to accept the transfer of the
above described loan from Seller.
Seller agrees to indemnify and hold harmless U.S. Bank National
Association, Bond Securitization, L.L.C., X.X. Xxxxxx Securities Inc. and
Barclays Capital Inc. for any losses incurred by such parties resulting from
the above described promissory note has been lost or misplaced.
By:___________________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in
and for said County and State, appeared ________________________, who
acknowledged the extension of the foregoing and who, having been duly sworn,
states that any representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
_____________________________
_____________________________
My commission expires ____________.
H-1
EXHIBIT I
FORM OF ERISA REPRESENTATION
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1,
Class [ ]
-----------------------------------------------------------
Ladies and Gentlemen:
1. The undersigned is the ______________________ of (the
"Transferee") a [corporation] duly organized and existing under the laws of
__________, on behalf of which he/she makes this affidavit.
2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Bond Securitization,
L.L.C., 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 Trustee (as defined in the Agreement) have
received a certificate from such transferee in the form hereof.
3. The Transferee either (x)(i) is not an employee benefit plan or
arrangement subject to Section 406 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), a plan or arrangement subject to Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"), the
Trustee of any such plan or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement or (ii)
(except in the case of the Class X and Residual Certificates is an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (y) has delivered to the Certificate Registrar an opinion of
counsel satisfactory to the Certificate Registrar, the Servicer and the
Depositor, and upon which the Trustee, the Depositor, the Servicer and the
Certificate Registrar shall be entitled to rely, to the effect that the
purchase and holding of such Certificate by the Transferee will not result in
a non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Trustee, the Depositor or the Servicer to any
obligation in addition to those undertaken by such entities in the Pooling and
Servicing Agreement, which opinion of counsel shall not be an expense of the
Trust, the Depositor, the Certificate Registrar or the Servicer.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
I-1
IN WITNESS WHEREOF, the Transferee has executed this certificate.
_______________________________________
[Transferee]
By:____________________________________
Name:
Title:
I-2
EXHIBIT J-1
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx,
XX-XX-XX0X,
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage
Asset-Backed Certificates, Series 2005-CB1 (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
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
J-2
EXHIBIT J-2
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx,
XX-XX-XX0X,
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage
Asset-Backed Certificates, Series 2005-CB1 (the "Certificates"), we certify
that (a) we understand that the Certificates are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws and are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto
or any additional information deemed necessary to our decision to purchase the
Certificates, (c) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Certificates under the Securities Act or that
would render the disposition of the Certificates a violation of Section 5 of
the Securities Act or require registration pursuant thereto, nor will act, nor
has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (d) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be
a qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in
J-3
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-4
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $ 1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
--------
1 Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $__________ in securities.
J-5
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State, territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for
the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
J-6
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
_______________________________________
Print Name of Buyer
By:____________________________________
Name:
Title:
Date:__________________________________
J-7
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities
(other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment Companies,
the cost of such securities was used, except (i) where the Buyer or the
Buyer's Family of Investment Companies reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been published.
If clause (ii) in the preceding sentence applies, the securities may be valued
at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
J-8
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
_______________________________________
Print Name of Buyer or Adviser
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:__________________________________
J-9
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
C-BASS MORTGAGE ASSET-BACKED CERTIFICATES,
SERIES 2005-CB1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is the proposed Transferee of an Ownership
Interest in the [Class R and/or Class XR Certificates] (the "Certificates")
issued pursuant to the Pooling and Servicing Agreement, (the "Agreement"),
relating to the above-referenced Certificates, among Bond Securitization,
L.L.C., 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 (the "Trustee"). Capitalized terms used, but not
defined herein shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificates either (i) for its own account or
(ii) as nominee, trustee or agent for another Person and has attached hereto
an affidavit from such Person in substantially the same form as this
affidavit. The Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificates to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificates if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
K-1
5. The Transferee has reviewed the provisions of Section 5.02(d)
of the Agreement and understands the legal consequences of the acquisition of
an Ownership Interest in the Certificates including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificates. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificates, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit K to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificates.
8. The Transferee's taxpayer identification number is ___________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificates may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan or other plan
or arrangement that is subject to ERISA or to Section 4975 of the Code, nor is
the Transferee acting on behalf of or investing plan assets of such a plan or
arrangement.
K-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of ______________, 20__.
[NAME OF TRANSFEREE]
By:___________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_____________________________
Authorized Signatory
Personally appeared before me the above-named ______________, known
or proved to me to be the same person who executed the foregoing instrument and
to be the ________________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this _____ day of _________, 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the ____ day of
____________, 20__.
K-3
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Bond Securitization, L.L.C.
Xxx Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage
Asset-Backed Certificates, Series 2005-CB1 (the "Certificates"), we certify
that (a) we understand that the Certificates have not been registered under
the Securities Act of 1933, as amended (the "Act"), and are being disposed by
us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, in a manner that would be
deemed, or taken any other action which would result in, a violation of
Section 5 of the Act, (c) to the extent we are disposing of a Class [ ]
Certificate, we have no knowledge the Transferee is not a Permitted Transferee
and (d) no purpose of the proposed disposition of a Class [ ] Certificate is
to impede the assessment or collection of tax.
Very truly yours,
[_____________________]
By: ___________________
L-1
EXHIBIT M
[RESERVED]
M-1
EXHIBIT N
[RESERVED]
N-1
EXHIBIT O
[RESERVED]
O-1
EXHIBIT P
MONTHLY INFORMATION DELIVERED BY SERVICER
1. With respect to the Mortgage Pool, the number and Principal Balances of all
Mortgage Loans which were the subject of Principal Prepayments during the
related Due Period.
2. With respect to the Mortgage Pool, the amount of all curtailments which
were received during the related Due Period.
3. With respect to the Mortgage Pool, the aggregate amount of principal
portion of all Monthly Payments received during the related Due Period.
4. With respect to the Mortgage Pool, the amount of interest received on the
Mortgage Loans during the related Due Period.
5. With respect to the Mortgage Pool, the aggregate amount of the Advances
made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the delinquency and foreclosure
information and the amount of Mortgage Loan Losses during the related Due
Period.
7. With respect to the Mortgage Pool, the weighted average maturity, the
weighted average Mortgage Interest Rate and the weighted average Net
Mortgage Interest Rate as of the last day of the Due Period preceding of
the related Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during the related Due
Period.
9. The amount of all payments or reimbursements to the Servicer paid or to be
paid since the prior Distribution Date (or in the case of the first
Distribution Date, since the Closing Date).
10. The Pool Balance.
11. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Due Period.
12. The aggregate interest accrued on the Mortgage Loans at their respective
Mortgage Interest Rates for the related Due Period.
13. The amount deposited in the Collection Account which may not be withdrawn
therefrom pursuant to an Order of a United States Bankruptcy Court of
competent jurisdiction imposing a stay pursuant to Section 362 of U.S.
Bankruptcy Code.
14. The aggregate Realized Losses since the Cut-off Date as of the end of the
related Due Period.
P-1
EXHIBIT Q
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
[Date]
Via Facsimile
U.S. Bank National Association, as Trustee
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Pre-Payments
------------
Dear Sir or Madam:
__________________ hereby certifies that he/she is an officer of
the Servicer, holding the office set forth beneath his/her name and hereby
further certifies as follows:
With respect to the Mortgage Loans set forth in the attached
schedule:
1. A Principal Prepayment in full was received during the related Collection
Period;
2. Any prepayment penalty due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Collection Account; ____ Yes ____ No
3. As to each Mortgage Loan so noted on the attached schedule, all or part of
the prepayment penalty required in connection with the Principal Prepayment
in full was waived based upon (Circle one): (i) the Servicer's
determination that such waiver would maximize recovery of Liquidation
Proceeds for such Mortgage Loan, taking into account the value of such
prepayment penalty, or (ii)(A) the enforceability thereof be limited (1) by
bankruptcy insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
4. We certify that all amounts due in connection with the waiver of a
prepayment penalty inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section 3.01 of the Pooling and
Servicing Agreement, have been or will be so deposited.
Q-1
Capitalized terms used herein shall have the meanings ascribed to
such terms in the Pooling and Servicing Agreement, dated as of January 1,
2005, (the "Pooling and Servicing Agreement") among the Bond Securitization,
L.L.C., 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.
By: XXXXXX LOAN SERVICING LP
_____________________________
Name:
Title:
Q-2
EXHIBIT R
[FORM OF CLASS AF-1 CONFIRMATION]
R-1
EXHIBIT S
[RESERVED]
S-1
EXHIBIT T
[RESERVED]
T-1
EXHIBIT U
[RESERVED]
U-1
EXHIBIT V
FORM CERTIFICATION TO BE PROVIDED BY THE SERVICER WITH FORM 10-K
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
I, [identify the certifying individual], certify that:
l. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report, of Bond
Securitization, L.L.C. (the "Registrant");
2. Based on my knowledge, the information in these reports, taken
as a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information, and the
servicing information required to be provided to the Trustee by the Servicer
under the Pooling and Servicing Agreement, is included in these reports;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon the review
required under the Pooling and Servicing Agreement, and except as disclosed in
the report, the Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
5. I have disclosed to the Registrant's certified public
accountants all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: U.S. Bank
National Association.
V-1
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated January 1, 2005
(the "Pooling and Servicing Agreement"), among the Registrant 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:
Date:
V-2
EXHIBIT W
FORM CERTIFICATION TO BE
PROVIDED TO THE SERVICER BY THE TRUSTEE
Re: C-BASS Mortgage Asset-Backed Certificates, Series 2005-CB1
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 Bond
Securitization, L.L.C. (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 January 1, 2005
(the "Pooling and Servicing Agreement"), among the Depositor as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller, the Servicer,
as servicer and U.S. Bank National Association, as trustee.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:__________________________________
Name:
Title:
Date:
W-1
EXHIBIT X
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 Bond Securitization, L.L.C. (the
"Depositor"), Xxxxxx Loan Servicing LP (the "Servicer"), Credit-Based Asset
Servicing and Securitization LLC (the "Seller") and the Trustee, dated as of
January 1, 2005 (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.
X-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.
Third parties without actual notice may rely upon the exercise of
the power granted under this Limited Power of
X-2
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.
X-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 January 1, 2005 (2005-CB1 Trust, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2005-CB1), 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 2005-CB1 Trust, Series
2005-CB1, C-BASS Mortgage Loan
Asset-Backed Certificates
By __________________________________
X-4
STATE OF ____________________
COUNTY OF ___________________
On ___________, 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 2005-CB1 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2005-CB1, 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 ________________________
X-5
