EXHIBIT 4
================================================================================
ASSET BACKED FUNDING CORPORATION,
Depositor
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller
XXXXXX LOAN SERVICING LP,
Servicer
and
JPMORGAN CHASE BANK,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2004
2004-CB5 Trust
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.....................................................
Section 1.02 Accounting........................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans......................................
Section 2.02 Acceptance by Trustee.............................................
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Seller............................................................
Section 2.04 Representations and Warranties of the Seller with Respect
to the Mortgage Loans.............................................
Section 2.05 Representations, Warranties and Covenants of the Servicer.........
Section 2.06 Representations and Warranties of the Depositor...................
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.........................................................
Section 2.08 Representations and Warranties of the Seller......................
Section 2.09 Covenants of the Seller...........................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.......................................
Section 3.02 Collection of Mortgage Loan Payments..............................
Section 3.03 Realization Upon Defaulted Mortgage Loans.........................
Section 3.04 Collection Account, Distribution Account and Reserve
Account...........................................................
Section 3.05 Permitted Withdrawals From the Collection Account.................
Section 3.06 Establishment of Escrow Account; Deposits in Escrow
Account...........................................................
Section 3.07 Permitted Withdrawals From Escrow Account.........................
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder............................................
Section 3.09 Transfer of Accounts..............................................
Section 3.10 Maintenance of Hazard Insurance...................................
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy...............
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.....................
Section 3.13 Title, Management and Disposition of REO Property and
Certain Delinquent Mortgage Loans.................................
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements........................................................
Section 3.15 Notification of Adjustments.......................................
Section 3.16 Optional Purchases and Sales of Mortgage Loans by
Servicer..........................................................
Section 3.17 Trustee to Cooperate; Release of Files............................
Section 3.18 Servicing Compensation............................................
Section 3.19 Annual Statement as to Compliance.................................
Section 3.20 Annual Independent Certified Public Accountants' Reports..........
Section 3.21 Access to Certain Documentation and Information Regarding
the Mortgage Loans................................................
Section 3.22 Reserved..........................................................
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest..........................................................
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments...............................
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account..............................................
Section 3.26 Liability of Servicer; Indemnification............................
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties........................................................
Section 3.28 Protection of Assets..............................................
Section 3.29 Periodic Filings..................................................
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions............................................
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts...........................................................
Section 4.03 Allocation of Losses..............................................
Section 4.04 Method of Distribution............................................
Section 4.05 Distributions on Book-Entry Certificates..........................
Section 4.06 Statements........................................................
Section 4.07 Remittance Reports; Advances......................................
Section 4.08 REMIC Distributions...............................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates..................................................
Section 5.02 Registration of Transfer and Exchange of Certificates.............
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.................
Section 5.04 Persons Deemed Owners.............................................
Section 5.05 Appointment of Paying Agent.......................................
ARTICLE VI
THE SELLER, THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Seller, the Servicer and the Depositor...........
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller, the Servicer or the Depositor.........
Section 6.03 Limitation on Liability of the Servicer and Others................
Section 6.04 Servicer Not to Resign............................................
Section 6.05 Delegation of Duties..............................................
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination....................................
Section 7.02 Trustee to Act; Appointment of Successor..........................
Section 7.03 Waiver of Defaults................................................
Section 7.04 Notification to Certificateholders................................
Section 7.05 Survivability of Servicer Liabilities.............................
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.................................................
Section 8.02 Certain Matters Affecting the Trustee.............................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.............
Section 8.04 Trustee May Own Certificates......................................
Section 8.05 Seller to Pay Trustee Fees and Expenses...........................
Section 8.06 Eligibility Requirements for Trustee..............................
Section 8.07 Resignation or Removal of Trustee.................................
Section 8.08 Successor Trustee.................................................
Section 8.09 Merger or Consolidation of Trustee................................
Section 8.10 Appointment of Co-Trustee or Separate Trustee.....................
Section 8.11 Limitation of Liability...........................................
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates......................................................
Section 8.13 Suits for Enforcement.............................................
Section 8.14 Waiver of Bond Requirement........................................
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.........
Section 8.16 Compliance with National Housing Act of 1934......................
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration..............................................
Section 9.02 Prohibited Transactions and Activities............................
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status......................................................
Section 9.04 REO Property......................................................
Section 9.05 Grantor Trust Administration......................................
ARTICLE X
TERMINATION
Section 10.01 Termination.......................................................
Section 10.02 Additional Termination Requirements...............................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.........................................................
Section 11.02 Recordation of Agreement; Counterparts............................
Section 11.03 Limitation on Rights of Certificateholders........................
Section 11.04 Governing Law; Jurisdiction.......................................
Section 11.05 Notices...........................................................
Section 11.06 Severability of Provisions........................................
Section 11.07 Article and Section References....................................
Section 11.08 Notice to the Rating Agencies.....................................
Section 11.09 Further Assurances................................................
Section 11.10 Benefits of Agreement.............................................
Section 11.11 Acts of Certificateholders........................................
EXHIBITS:
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 B-1 Form of Class B-1 Certificates
Exhibit B-2 Form of Class B-2 Certificates
Exhibit B-3 Form of Class B-3 Certificates
Exhibit B-4 Form of Class B-4 Certificates
Exhibit C-1-1 Form of Class R Certificate
Exhibit C-1-2 Form of Class R-A Certificate
Exhibit C-2 Form of Class M-1 Certificates
Exhibit C-3 Form of Class M-2 Certificates
Exhibit C-4 Form of Class M-3 Certificates
Exhibit C-5 Form of Class X Certificates
Exhibit C-6 Form of Class N Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release of Documents
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 Form of Investment Letter
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M [Reserved]
Exhibit N DTC Letter of Representations
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 Notice of Prepayment Penalty Inconsistency
Exhibit S Form of Yield Maintenance Agreement
Exhibit T Form of Certification
Exhibit U Form of Certification to be Provided by Trustee
Exhibit V Schedule of Mortgage Loans without Title Policies
Exhibit W Form of Power of Attorney
This Pooling and Servicing Agreement is dated as of July 1, 2004
(the "Agreement"), among ASSET BACKED FUNDING CORPORATION, as depositor (the
"Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as seller
(the "Seller"), XXXXXX LOAN SERVICING LP, as servicer (the "Servicer"), and
JPMORGAN CHASE BANK, 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 fourteen
Classes of Certificates, designated as (i) the Class AV-1, Class AV-2 and Class
AV-3 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 and Class B-4 Certificates, (iv) the
Class N Certificates, (v) the Class X Certificates and (vi) the Class R and
Class R-A Certificates.
REMIC 1
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement (but exclusive of the Yield Maintenance
Agreement, the Reserve Fund, any LIBOR Carryover Amount and the prepayment
charges) as a real estate investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC 1."
The Class R-1 Interest will represent the sole class of "residual interests" in
REMIC 1 for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, the Uncertificated REMIC
1 Pass-Through Rate, the initial Uncertificated Principal Balance, and solely
for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC 1 Regular Interests. None
of the REMIC 1 Regular Interests will be certificated.
Initial
Uncertificated REMIC Uncertificated Latest Possible
Designation Pass-Through Rate(1) Principal Balance Maturity Date(1)
----------- -------------------- ----------------- ----------------
LT1AA (2) $219,521,502.44 April 25, 2034
LT1AV1 (2) $817,000.00 April 25, 2034
LT1AV2 (2) $817,500.00 April 25, 2034
LT1AV3 (2) $188,990.00 April 25, 2034
LT1M1 (2) $117,610.00 April 25, 2034
LT1M2 (2) $106,410.00 April 25, 2034
LT1M3 (2) $28,000.00 April 25, 2034
LT1B1 (2) $28,000.00 April 25, 2034
LT1B2 (2) $22,400.00 April 25, 2034
LT1B3 (2) $22,400.00 April 25, 2034
LT1B4 (2) $22,400.00 April 25, 2034
LT1ZZ (2) $2,309,320.66 Xxxxx 00, 0000
XX0XX (2) $224,001,533.10 April 25, 2034
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC 1 Regular Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC 1
Pass-Through Rate" herein.
REMIC 2
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." REMIC 2 will issue as regular interests (i) the Classes
of Certificates (exclusive of the rights of such Classes of Certificates to
receive LIBOR Carryover Amounts) indicated as issued by REMIC 2 in the table at
the end of the Preliminary Statement, (ii) the REMIC 2 Class B-3 Interest (as
described in footnote 10 to the table at the end of the Preliminary Statement),
(iii) the REMIC 2 Class B-4 Interest (as described in footnote 10 to the table
at the end of the Preliminary Statement) and (iv) the REMIC 2 Class X/N Interest
(as described in footnote 12 at the end of the Preliminary Statement). The Class
R-2 Interest represents the sole class of "residual interests" in REMIC 2 for
purposes of the REMIC Provisions.
REMIC A
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Class X/N Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC A." The REMIC A Class X/N Interest represents the sole
class of regular interests and the Class R-A Interest represents the sole class
of "residual interests" in REMIC A for purposes of the REMIC Provisions. The
REMIC A Class X/N Interest shall have a principal balance equal to the REMIC 2
Class X/N Interest and shall bear interest at the same rate as the REMIC 2 Class
X/N Interest.
REMIC B
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interest B-3 as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC B." The Class B-3 Certificates (exclusive of the right
to LIBOR Carryover Amounts) represent the sole class of "regular interests" and
the Class R-B Interest represents the sole class of "residual interests" in
REMIC B for purposes of the REMIC Provisions. The Class B-3 Certificates shall
have a principal balance equal to the REMIC 2 Class B-3 Interest and shall bear
interest at the same rate as the REMIC 2 Class B-3 Interest.
REMIC C
As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interest B-4 as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC C." The Class B-4 Certificates (exclusive of the right
to LIBOR Carryover Amounts) represent the sole class of "regular interests" and
the Class R-C Interest represents the sole class of "residual interests" in
REMIC C for purposes of the REMIC Provisions. The Class B-4 Certificates shall
have a principal balance equal to the REMIC 2 Class B-4 Interest and shall bear
interest at the same rate as the REMIC 2 Class B-4 Interest.
Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date following the maturity date for the Mortgage
Loan with the latest maturity date has been designated as the "latest possible
maturity date" for each Class of Certificates that represents one or more of the
"regular interests" in REMIC 2, REMIC A, REMIC B or REMIC C.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and the Original Class Certificate Principal Balance or the
Original Class N Notional Amount, for each Class of Certificates comprising the
interests in the Trust Fund created hereunder:
Original Class
Certificate Pass-
Issuing Principal Balance Through Assumed Final
Class REMIC or Notional Amount Rate Maturity Dates
--------- -------- ------------------ ------- ------------------
AV-1 2 $163,400,000.00 (1) September 25, 2021
AV-2 2 $163,500,000.00 (2) March 25, 2032
AV-3 2 $37,798,000.00 (3) March 25, 2034
M-1 2 $23,522,000.00 (4) January 25, 2034
M-2 2 $21,282,000.00 (5) December 25, 2033
M-3 2 $5,600,000.00 (6) October 25, 2033
B-1 2 $5,600,000.00 (7) September 25, 2033
B-2 2 $4,480,000.00 (8) August 25, 2033
B-3(10) 2 $4,480,000.00 (9) June 25, 2033
B-4(10) B $4,480,000.00 (11) April 25, 2033
N(12) (12) $24,065,420.00(12)(13) 5.926% N/A
X(12) (12) N/A(12) N/A N/A
R 1, 2(14) N/A N/A N/A
R-A 1, 2(15) N/A N/A N/A
--------- -------- ------------------ ------- ------------------
Total $434,142,000.00(16)
(1) Interest will accrue on the Class AV-1 Certificates at a rate equal to the
lesser of: (i) the Class AV-1 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(2) Interest will accrue on the Class AV-2 Certificates at a rate equal to the
lesser of: (i) the Class AV-2 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(3) Interest will accrue on the Class AV-3 Certificates at a rate equal to the
lesser of: (i) the Class AV-3 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(4) Interest will accrue on the Class M-1 Certificates at a rate equal to the
lesser of: (i) the Class M-1 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(5) Interest will accrue on the Class M-2 Certificates at a rate equal to the
lesser of: (i) the Class M-2 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(6) Interest will accrue on the Class M-3 Certificates at a rate equal to the
lesser of: (i) the Class M-3 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(7) Interest will accrue on the Class B-1 Certificates at a rate equal to the
lesser of: (i) the Class B-1 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(8) Interest will accrue on the Class B-2 Certificates at a rate equal to the
lesser of: (i) the Class B-2 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(9) Interest will accrue on the Class B-3 Certificates at a rate equal to the
lesser of: (i) the Class B-3 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(10) REMIC 2 will issue Uncertificated Regular Interests economically
equivalent to the Class B-3 Certificates and Class B-4 Certificates,
respectively. The REMIC 2 Class B-3 Interest will be an asset of REMIC B
which will issue the Class B-3 Certificates as described under "REMIC B"
in this Preliminary Statement. The REMIC 2 Class B-4 Interest will be an
asset of REMIC C which will issue the Class B-4 Certificates as described
under "REMIC C" in this Preliminary Statement.
(11) Interest will accrue on the Class B-4 Certificates at a rate equal to the
lesser of: (i) the Class B-4 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(12) The Class N and Class X Certificates, collectively, represent the
beneficial ownership of the Class X/N Interest. REMIC 2 will issue the
REMIC 2 Class X/N Interest, which will be an asset of REMIC A. REMIC A
will issue the REMIC A Class X/N Interest. The REMIC 2 Class X/N Interest
and the REMIC A Class X/N Interest will have a principal balance equal to
the Class X/N Uncertificated Principal Balance but will not bear interest
on that balance. The REMIC 2 Class X/N Interest and the REMIC A Class X/N
Interest will bear interest on the Notional Balance therefor at the Pass
Through Rate therefor. The X Certificates and Class N Certificates will
represent the beneficial ownership of the REMIC A Class X/N Interest and
beneficial rights with respect to the Yield Maintenance Agreement and the
Reserve Account, subject to the obligation to pay LIBOR Carryover Amounts.
(13) Initial Class N Notional Amount.
(14) The Class R Certificate will represent beneficial ownership of the Class
R-1 Interest and the Class R-2 Interest.
(15) The Class R-A Certificate will represent beneficial ownership of the Class
R-A Interest, the Class R-B Interest and the Class R-C Interest.
(16) Exclusive of the Class N Notional Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest on
the Offered Certificates will be calculated on the basis of the actual number of
days in the related Interest Accrual Period and a 360-day year. Interest on the
Class N and Class X Certificates and the REMIC Regular Interests will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to which
any portion of a Monthly Payment is, as of the last day of the prior Collection
Period, two months or more past due, each Mortgage Loan in foreclosure, all REO
Property and each Mortgage Loan for which the Mortgagor has filed for bankruptcy
after the Closing Date.
"Account": Any of the Collection Account, the Distribution Account,
the Escrow Account and the Reserve Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of 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 of such Class of Certificates, reduced by such
Class's Interest Percentage of Relief Act Interest Shortfalls for such
Distribution Date.
"Actuarial Mortgage Loan": Any Mortgage Loan other than a Simple
Interest Mortgage Loan.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjustment Date": With respect to each Adjustable-Rate Mortgage
Loan, each adjustment date, on which the Mortgage Interest Rate of an
Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-off Date as to each Adjustable-Rate
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Advance": As to any Actuarial Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Distribution Date pursuant to
Section 4.07.
"Advance Facility": As defined in Section 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.
"Agency Insurance Agreements": The FHA Insurance Contracts.
"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto,
including with respect to each FHA Loan, the FHA Regulations and the related FHA
Insurance Contract.
"Applied Realized Loss Amount": With respect to each Distribution
Date, the excess, if any, of (a) the aggregate of the Certificate Principal
Balances of the Certificates (after giving effect to all distributions on such
Distribution Date and any increase in any Certificate Principal Balance as a
result of Subsequent Recoveries) over (b) the Pool Balance as of the end of the
related Collection Period.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due
during the related Collection Period and received by the Servicer on or prior to
the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, Principal Prepayments, Substitution Adjustment Amounts,
the Purchase Price for any repurchased Mortgage Loan, the Termination Price with
respect to the termination of the Trust pursuant to Section 10.01 hereof, any
Reimbursement Amount or Subsequent Recovery deposited to the Collection Account
and other unscheduled recoveries of principal and interest (excluding prepayment
penalties) in respect of the Mortgage Loans during the related Prepayment
Period, (c) the aggregate of any amounts received in respect of an REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) any Compensating Interest for such Distribution Date, and
(e) the aggregate of any Advances made by the Servicer for such Distribution
Date over (ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to Section 3.05, (b) Stayed Funds, (c) the Servicing Fee and (d)
amounts deposited in the Collection Account or the Distribution Account, as the
case may be, in error.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal balance of
a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that
is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as amended.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Offered Certificates shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, the State of New York, the
State of Texas or in the city in which the Corporate Trust Office of the Trustee
is located are authorized or obligated by law or executive order to be closed.
"Certificate": Any Regular Certificate or Residual Certificate.
"Certificate Custodian": Initially, JPMorgan Chase Bank; thereafter
any other Certificate Custodian acceptable to the Depository and selected by the
Trustee.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class N, Class X and Residual Certificates) and any
Distribution Date, the Original Class Certificate Principal Balance (a) reduced
by the sum of (i) all amounts actually distributed in respect of principal of
such Class on all prior Distribution Dates and (ii) Applied Realized Loss
Amounts allocated thereto and (b) increased by any Subsequent Recoveries
allocated to such Class for previous Distribution Dates. The Class N, Class X
and Residual Certificates do not have a Certificate Principal Balance. With
respect to any Certificate (other than a Class N, Class X or a Residual
Certificate) of a Class and any Distribution Date, the portion of the
Certificate Principal Balance of such Class represented by such Certificate
equal to the product of the Percentage Interest evidenced by such Certificate
and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or Disqualified 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 AV-1 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.130% per annum, and (ii) following
the Optional Termination Date, 0.260% per annum.
"Class AV-1 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class AV-1 Certificate Margin.
"Class AV-2 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.320% per annum, and (ii) following
the Optional Termination Date, 0.640% per annum.
"Class AV-2 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class AV-2 Certificate Margin.
"Class AV-3 Certificate Margin": For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.520% per annum, and (ii) following
the Optional Termination Date, 1.040% per annum.
"Class AV-3 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class AV-3 Certificate Margin.
"Class A 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 and A-3, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class A Certificateholders": Collectively, the Holders of the Class
A Certificates.
"Class A Interest Carry Forward Amount": For any Distribution Date,
the sum of the Interest Carry Forward Amounts for the Class A Certificates for
such Distribution Date.
"Class A Principal Distribution Amount": As of any Distribution Date
(a) prior to the Stepdown Date or with respect to which a Trigger Event is in
effect, the Principal Distribution Amount and (b) on or after the Stepdown Date
and as long as a Trigger Event is not in effect, the excess of (x) the sum of
the Certificate Principal Balances of the Class A Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 62.30%
and (ii) the Pool Balance as of the last day of the related Collection Period
and (B) the Pool Balance as of the last day of the related Collection Period
minus the product of (i) 0.50% and (ii) the Pool Balance on the Cut-off Date.
"Class B Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx X-0, Exhibit B-3 and Exhibit B-4, executed by the Trustee
on behalf of the Trust and authenticated and delivered by the Certificate
Registrar, representing the right to distributions as set forth herein and
therein.
"Class B Certificateholders": Collectively, the Holders of the Class
B Certificates.
"Class B-1 Applied Realized Loss Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class B-1 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class B-2 Applied Realized
Loss Amount, the Class B-3 Applied Realized Loss Amount and the Class B-4
Applied Realized Loss Amount as of such Distribution Date.
"Class B-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.850% per annum, and (ii) following the
Optional Termination Date, 2.775% per annum.
"Class B-1 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class B-1 Certificate Margin.
"Class B-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date) and (v)
the Certificate Principal Balance of the Class B-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
87.30% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Pool Balance as of the last day of the related Collection
Period minus the product of 0.50% and the Pool Balance on the Cut-off Date.
"Class B-1 Realized Loss Amortization Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.
"Class B-2 Applied Realized Loss Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class B-2 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class B-3 Applied Realized
Loss Amount and the Class B-4 Applied Realized Loss Amount as of such
Distribution Date.
"Class B-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.950% per annum, and (ii) following the
Optional Termination Date, 2.925% per annum.
"Class B-2 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class B-2 Certificate Margin.
"Class B-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the 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 Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 89.30% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-off Date.
"Class B-2 Realized Loss Amortization Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvii) hereof, in each
case for such Distribution Date.
"Class B-3 Applied Realized Loss Amount": As to the Class B-3
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class B-3 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the Class B-4 Applied Realized Loss Amount
as of such Distribution Date.
"Class B-3 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.500% per annum, and (ii) following the
Optional Termination Date, 2.250% per annum.
"Class B-3 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class B-3 Certificate Margin.
"Class B-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the 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 Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 91.30% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Pool Balance on the Cut-off Date.
"Class B-3 Realized Loss Amortization Amount": As to the Class B-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xx) hereof, in each case
for such Distribution Date.
"Class B-4 Applied Realized Loss Amount": As to the Class B-4
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class B-4 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the Applied Realized Loss Amount as of such
Distribution Date.
"Class B-4 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.500% per annum, and (ii) following the
Optional Termination Date, 2.250% per annum.
"Class B-4 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class B-4 Certificate Margin.
"Class B-4 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Class A Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the 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) and
(viii) the Certificate Principal Balance of the Class B-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 93.30% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-off Date.
"Class B-4 Realized Loss Amortization Amount": As to the Class B-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution 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 C-2, Exhibit C-3 and Exhibit C-4, executed by the Trustee on behalf of
the Trust and authenticated and delivered by the Certificate Registrar,
representing the right to distributions as set forth herein and therein.
"Class M Certificateholders": Collectively, the Holders of the Class
M Certificates.
"Class M-1 Applied Realized Loss Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class M-1 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as
of such Distribution Date over (ii) the sum of the Class M-2 Applied Realized
Loss Amount, the Class M-3 Applied Realized Loss Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied Realized Loss Amount, the Class B-3
Applied Realized Loss Amount and the Class B-4 Applied Realized Loss Amount, in
each case as of such Distribution Date.
"Class M-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.610% per annum, and (ii) following the
Optional Termination Date, 0.915% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class M-1 Certificate Margin.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 72.80% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.50% and the Pool Balance on the Cut-off Date.
"Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (v) hereof, in each case
for such Distribution Date.
"Class M-2 Applied Realized Loss Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class M-2 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the related Applied Realized Loss
Amount as of such Distribution Date over (ii) the sum of the Class M-3 Applied
Realized Loss Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2
Applied Realized Loss Amount, the Class B-3 Applied Realized Loss Amount and the
Class B-4 Applied Realized Loss Amount, in each case as of such Distribution
Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.200% per annum, and (ii) following the
Optional Termination Date, 1.800% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class M-2 Certificate Margin.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 82.30% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-off Date.
"Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (viii) hereof, in each
case for such Distribution Date.
"Class M-3 Applied Realized Loss Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Certificate
Principal Balance thereof (after taking into account the distribution of the
Principal Distribution Amount on such Distribution Date and any increase in
Certificate Principal Balance as a result of Subsequent Recoveries, but prior to
the application of the Class M-3 Applied Realized Loss Amount, if any, on such
Distribution Date) and (y) the excess of (i) the related Applied Realized Loss
Amount as of such Distribution Date over (ii) the sum of the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied Realized Loss Amount, the Class B-3
Applied Realized Loss Amount and the Class B-4 Applied Realized Loss Amount, in
each case as of such Distribution Date.
"Class M-3 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.400% per annum, and (ii) following the
Optional Termination Date, 2.100% per annum.
"Class M-3 Pass-Through Rate": For each Distribution Date, LIBOR as
of the related LIBOR Determination Date, plus the Class M-3 Certificate Margin.
"Class M-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (ii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (iv) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 84.80% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.50% and the
Pool Balance on the Cut-off Date.
"Class M-3 Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xi) hereof, in each case
for such Distribution 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 N Notional Amount": As of any date, the Notional Amount of
the Class N Certificates.
"Class R Certificate": The Class R Certificate executed by the
Trustee on behalf of the Trust, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit C-1
and evidencing the ownership of the Residual Interest in each of REMIC 1 and
REMIC 2. The Class R Certificate represents the ownership of the Class R-1
Interest and Class R-2 Interest.
"Class R-A Interest": The uncertificated residual interest in REMIC
A.
"Class R-B Interest": The uncertificated residual interest in REMIC
B.
"Class R-C Interest": The uncertificated residual interest in REMIC
C.
"Class R-1 Interest": The uncertificated residual interest in REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in REMIC
2.
"Class R-A Certificate": The Class R-A Certificate executed by the
Trustee on behalf of the Trust, and authenticated and delivered by the
Certificate Registrar, substantially in the form annexed hereto as Exhibit C-1-2
and evidencing the ownership of the Residual Interest in each of REMIC A, REMIC
B and REMIC C. The Class R-A Certificate represents the ownership of the Class
R-A Interest, Class R-B Interest and Class R-C Interest.
"Class X": Any one of the Class X Certificates as designated on the
face thereof substantially in the form annexed hereto as 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.
"Class X/N Interest": An uncertificated interest in the Trust held
by the Trustee on behalf of the holders of the Class X and Class N Certificates,
representing ownership of the REMIC A Class X/N Interest and beneficial rights
with respect to the Yield Maintenance Agreement and the Reserve Account, less
the amount (without duplication) of any LIBOR Carryover Amounts paid pursuant to
Section 4.02(b)(xxv) and (xxvi).
"Class X/N Uncertificated Principal Balance": The Initial
Overcollateralization Amount minus the sum of (i) any Realized Losses allocated
thereto and (ii) any amounts distributed (or deemed distributed) to the REMIC 2
Class X/N Interest with respect thereto.
"Class X Distributable Amount": With respect to any Distribution
Date, the excess of (i) the aggregate of amounts distributable on the Class X/N
Interest for such Distribution Date, over (ii) the aggregate of amounts
distributable to the Class N Certificates pursuant to Section 4.02(b).
"Closing Date": August 12, 2004.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained
by the Servicer pursuant to Section 3.04, which shall be entitled "Collection
Account, Xxxxxx Loan Servicing LP, as Servicer for the Trust under the Pooling
and Servicing Agreement dated as of July 1, 2004 among Asset Backed Funding
Corporation, as Depositor, Credit-Based Asset Servicing and Securitization LLC,
as Seller, Xxxxxx Loan Servicing LP, as Servicer, and JPMorgan Chase Bank, as
Trustee, in trust for registered Holders of 2004-CB5 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB5," 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 as of such date of determination plus the principal
balance of any related senior mortgage loan, if any, at origination of the
Mortgage Loan and the denominator of which is the Value of the related Mortgaged
Property.
"Compensating Interest": As defined in Section 3.23 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Conventional Mortgage Loan": Any Mortgage Loan that is not an FHA
Loan.
"Co-op Shares": Shares issued by private non-profit housing
corporations.
"Corporate Trust Office": With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time (a) 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 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Institutional Trust Services/Global Debt, C-BASS Series 2004-CB5, and
(b) Certificates may be presented for transfer and exchanged and for purposes of
surrender for the final distributions thereon is located at 0000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxx, Xxxxx 00000, Attention: Institutional Trust Services, C-BASS
2004-CB5 or at such other address as the Trustee may designate from time to time
by notice to the Certificateholders, the Depositor, the Servicer and the Seller.
"Corresponding Classes": With respect to REMIC 1 and REMIC 2, the
following Classes shall be Corresponding Classes:
Corresponding REMIC 1 Classes Corresponding REMIC 2 Classes
----------------------------- ----------------------------------
LT1AV1 Class AV-1 Certificates
LT1AV2 Class AV-2 Certificates
LT1AV3 Class AV-3 Certificates
LT1M1 Class M-1 Certificates
LT1M2 Class M-2 Certificates
LT1M3 Class M-3 Certificates
LT1B1 Class B-1 Certificates
LT1B2 Class B-2 Certificates
LT1B3 REMIC 2 Class B-3 Regular Interest
LT1B4 REMIC 2 Class B-4 Regular Interest
"Custodial Agreement": The Custodial Agreement, dated as of July 1,
2004, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.
"Custodian": The Bank of New York, a New York banking corporation,
or any successor custodian appointed pursuant to the terms of the Custodial
Agreement.
"Cut-off Date": July 1, 2004.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date (or as of the applicable date
of substitution with respect to an Eligible Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment and/or any Escrow Payment due on a Due Date is not made by the close of
business on the next scheduled Due Date for such Mortgage Loan or any Mortgage
Loan with respect to which any Servicing Advances made on or before the Cut-off
Date has not been reimbursed by the related Mortgagor.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The Depository
shall initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
10th day of the calendar month in which such Distribution Date occurs or, if
such 10th day is not a Business Day, the Business Day immediately preceding such
10th day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust other than through an
Independent Contractor; provided, however, that the Trustee (or the Servicer
under this Agreement) shall not be considered to Directly Operate an REO
Property solely because the Trustee (or the Servicer under this Agreement)
establishes rental terms, chooses tenants, enters into or renews leases, deals
with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Non-U.S. Person": With respect to a Residual
Certificate, any (A) non-U.S. Person or agent thereof or (B) U.S. Person with
respect to whom income from a Residual Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"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, JPMorgan Chase Bank, as Trustee, in trust for the
registered Holders of 2004-CB5 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB5" and which must be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in August 2004.
"Dominion": 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, "Dominion" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.
"Eligible Account": Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1" (or the equivalent) by each of the Rating Agencies at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for
a Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled 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 the same Index as the Defective Mortgage Loan, (vi) if an
Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than the
Gross Margin of the Defective Mortgage Loan, (vii) if an Adjustable-Rate
Mortgage Loan, have the same Index as the Defective Mortgage Loan, (viii) 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, (ix)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Defective Mortgage Loan, (x) be current as of the date of
substitution, (xi) 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, (xii) have a risk grading determined by
the Seller at least equal to the risk grading assigned on the Defective Mortgage
Loan, (xiii) have been reunderwritten by the Seller in accordance with the same
underwriting criteria and guidelines as the Defective Mortgage Loan, (xiv) have
the same Due Date as the Defective Mortgage Loan and (xv) 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 (xii) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (ix) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Combined
Loan-to-Value Ratios described in clause (xi) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xv) hereof
must be satisfied as to each Eligible Substitute Mortgage Loan or in the
aggregate, as the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2, Class B-3, Class B-4, Class N, Class X, Class R
and Class R-A Certificates.
"Escrow Account": The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Expense Fee Rate": 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.
"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.
"First Lien Mortgage Loan": Any of the of the Mortgage Loans which
are secured by a first mortgage lien that is senior to a junior lien if any, on
the related Mortgaged Property.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Grantor Trust": That portion of the Trust exclusive of REMIC 1,
REMIC 2, REMIC A, REMIC B and REMIC C consisting of (a) the right of the Offered
Certificates to receive LIBOR Carryover Amounts, (b) the Yield Maintenance
Agreement, the Reserve Account and the beneficial interest of the Class X/N
Interest with respect thereto and (c) the obligation of the Class X/N Interest
to pay LIBOR Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan,
the fixed percentage, if any, 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.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto, 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 Regulations Section 1.856-4(b)(5), or (ii)
any other Person (including the Servicer) if the Trustee has received an Opinion
of Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"Index": With respect to each Adjustable-Rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
"Initial Certificate Principal Balance": With respect to any
Certificate of a Class other than a Class N, Class X or Residual Certificate,
the amount designated "Initial Certificate Principal Balance" on the face
thereof.
"Initial Overcollateralization Amount": $13,861,066.20.
"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 Offered Certificates, the REMIC 2 Class B-3 Interest and
the REMIC 2 Class B-4 Interest, the period from the preceding Distribution Date
through the day prior to the current Distribution Date (or, in the case of the
first Distribution Date, the period from the Closing Date through August 24,
2004), and (ii) with respect to (a) the Class N and Class X Certificates, the
REMIC 2 Class X/N Interest and the REMIC A Class X/N Interest and (b) the REMIC
1 Regular Interests, the calendar month immediately preceding the month in which
such Distribution Date occurs.
"Interest Carry Forward Amount": For any Class of Certificates
(other than the Class X and Residual Certificates) and any Distribution Date,
the sum of (a) the excess, if any, of the Accrued Certificate Interest and any
Interest Carry Forward Amount for each Class for the prior Distribution Date,
over the amount in respect of interest actually distributed on such Class on
such prior Distribution Date and (b) interest on such excess at the applicable
Pass-Through Rate (x) with respect to the Certificates (other than the Class N
Certificates), on the basis of the actual number of days elapsed on the basis of
a 360-day year since the prior Distribution Date, and (y) with respect to the
Class N Certificates, 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 of Certificates, in each case with respect
to such Distribution Date and without regard to shortfalls caused by the Relief
Act or similar state laws.
"Interest Remittance Amount": As of any Distribution Date, the sum,
without duplication, of (i) all interest received by the Servicer on or prior to
the related Determination Date for such Distribution Date or advanced with
respect to Monthly Payments due during the related Collection Period on the
Mortgage Loans (less the Servicing Fee, amounts available for reimbursement of
Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) the portion of any full or partial
Principal Prepayment related to interest with respect to a Mortgage Loan
received during the related Prepayment Period, (iii) all Compensating Interest
paid by the Servicer on the related Determination Date with respect to the
Mortgage Loans, (iv) the portion of any payment in connection with any Purchase
Price, Net Liquidation Proceeds, Insurance Proceeds or Condemnation Proceeds
relating to interest with respect to the Mortgage Loans received during the
related Prepayment Period, (v) the portion of any Substitution Adjustment Amount
relating to interest with respect to the Mortgage Loans received during the
related Prepayment Period, (vi) with respect to the related Distribution Date on
which the Trust is to be terminated in accordance with the Section 10.01 hereof,
the Termination Price with respect to the Mortgage Loans in respect of interest
and (vii) the portion of any Reimbursement Amount related to the Mortgage Loans
received during the related Prepayment Period.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Collection Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Collection Period and not previously recovered.
"Lender": As defined in Section 6.05(b).
"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:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide quotations as to the rate at which deposits in U.S. Dollars are
offered as of 11:00 a.m. (London time) to prime banks in the London
interbank market for a period of one month in amounts approximately equal
to the aggregate Certificate Principal Balance of the Offered
Certificates, 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
(iii) If no such quotations can be obtained, LIBOR for the related
Interest Accrual Period shall be LIBOR for the prior Distribution Date.
"LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.
"LIBOR Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for the Offered Certificates is based on the Pool Cap, the
excess of (i) the amount of interest such Certificate would have been entitled
to receive on such Distribution Date based on the related Pass-Through Rate,
over (ii) the amount of interest such Certificate received on such Distribution
Date based on the Pool Cap, together with the unpaid portion of any such excess
from prior Distribution Dates (and interest accrued thereon at the then
applicable Pass-Through Rate on such Certificate).
"LIBOR Determination Date": With respect to the Offered
Certificates, (i) for the first Distribution Date, the second LIBOR Business Day
preceding the Closing Date and (ii) for each subsequent Distribution Date, the
second LIBOR Business Day prior to the immediately preceding Distribution Date.
"Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the 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": The report with respect to a Liquidated
Mortgage Loan in such form and containing such information as is agreed to by
the Servicer and the Trustee.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51% Percentage Interest in the Class R
Certificates.
"Marker Rate": With respect to the REMIC A Class X/N Interest and
the REMIC 2 Class X/N Interest and any Distribution Date, a per annum rate equal
to two (2) times the weighted average of the Uncertificated REMIC Pass-Through
Rates for REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular Interest LT1AV2,
REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3, REMIC 1 Regular
Interest LT1B4 and REMIC 1 Regular Interest LT1ZZ, (i) with the rate on each
such REMIC Regular Interest (other than REMIC 1 Regular Interest LT1ZZ) subject
to a cap equal to the Pass-Through Rate of its Corresponding Class (taking into
account in determining any such Pass-Through Rate the imposition of the Pool
Cap, as described in footnotes 1 through 9 and footnote 11 to the table at the
end of the Preliminary Statement) for the purposes of this calculation and (ii)
with the rate on REMIC 1 Regular Interest LT1ZZ subject to a cap of zero for the
purpose of this calculation; provided, however, that for this purpose,
calculations of the Uncertificated REMIC 1 Pass-Through Rate and the Pool Cap
with respect to each such REMIC Regular Interest (other than REMIC 1 Regular
Interest LT1ZZ) shall be multiplied by a fraction, the numerator of which is the
actual number of days in the Interest Accrual Period and the denominator of
which is 30.
"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.
"Maximum LT1ZZ Uncertificated Accrued Interest Deferral Amount":
With respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1ZZ for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1ZZ minus the REMIC 1
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1AV1, REMIC 1
Regular Interest LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3,
REMIC 1 Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3 and REMIC 1 Regular Interest LT1B4, each subject to a cap equal
to the Pass-Through Rate of the related Corresponding Class (taking into account
in determining any such Pass-Through Rate the imposition of the Pool Cap, as
described in footnotes 1 through 9 and footnote 11 to the table at the end of
the Preliminary Statement) for the purpose of this calculation; provided,
however, that for this purpose, calculations of the Uncertificated REMIC 1
Pass-Through Rate and the related caps with respect to Uncertificated Accrued
Interest on REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular Interest LT1AV2,
REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3 and REMIC 1
Regular Interest LT1B4 shall be multiplied by a fraction, the numerator of which
is the actual number of days in the Interest Accrual Period and the denominator
of which is 30.
"Minimum Loan Rate": With respect to each Adjustable-Rate Mortgage
Loan, either the percentage set forth in the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder or if no such percentage is set forth
in the related Mortgage Note, the Gross Margin set forth in the related Mortgage
Note.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates.
"Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (x) under Section 4.01.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the 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.
"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 and set forth in Exhibit D attached hereto.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of July 1, 2004, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date with respect to the
Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on
such date, attached hereto as Exhibit D. The Mortgage Loan Schedule shall 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;
(17) a code indicating whether the Mortgage Loan is a Simple Interest
Mortgage Loan or an Actuarial Mortgage Loan;
(18) a code indicating whether the Mortgaged Property is in bankruptcy or
in its forbearance period as of the Cut-off Date;
(19) a code indicating whether the Mortgage Loan is conventional or
insured by the FHA
(20) a code indicating the Index that is associated with such Mortgage
Loan;
(21) the Gross Margin;
(22) the Periodic Rate Cap;
(23) the Minimum Loan Rate;
(24) the Maximum Loan Rate;
(25) a code indicating whether the Mortgage Loan has a prepayment penalty
and the type of prepayment penalty;
(26) the first Adjustment Date immediately following the Cut-off Date;
(27) the rate adjustment frequency;
(28) the payment adjustment frequency;
(29) a code indicating whether the Mortgage Loan is owner-financed; and
(30) a code indicating whether the Mortgage Loan is a Second Lien
Mortgage Loan.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current Principal Balance
of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan Schedule shall be amended from time to time by the Seller in
accordance with the provisions of this Agreement. With respect to any Eligible
Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date
for such Mortgage Loan, determined in accordance with the definition of Cut-off
Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan (which may also include Co-op Shares), including any REO Property,
consisting of an Estate in Real Property improved by a Residential Dwelling or
multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid servicing fees received and
retained in connection with the liquidation of such Mortgage Loan or Mortgaged
Property.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Servicer, will not or,
in the case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan or REO Property 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)(xxvii). With respect to the REMIC 2 Class X/N Interest and the REMIC A
Class X/N Interest, an amount equal to the aggregate principal balance of the
REMIC 1 Regular Interests.
"Offered Certificates": The Class AV-1, Class AV-2, Class AV-3,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Servicer 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 may opt to terminate the Mortgage Pool pursuant to Section 10.01.
"Original Class N Notional Amount": The Notional Amount of the Class
N Certificates on the Closing Date, as set forth opposite such Class in the
Preliminary Statement.
"Original Class Certificate Principal Balance": With respect to each
Class of Certificates, the Certificate Principal Balance thereof on the Closing
Date, as set forth opposite such Class in the Preliminary Statement, except with
respect to the Class N, Class X and Residual Certificates, which have an
Original Class Certificate Principal Balance of zero.
"Overcollateralization Amount": As of any Distribution Date, the
excess, 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 (after taking into account all
distributions of principal on such Distribution Date and the increase of any
Certificate Principal Balance as a result of Subsequent Recoveries).
"Overcollateralization Deficiency": As of any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of all
Classes of Offered Certificates resulting from the distribution of the Principal
Distribution Amount (but not the Extra Principal Distribution Amount) on such
Distribution Date, but prior to taking into account any Applied Realized Loss
Amounts on such Distribution Date.
"Overcollateralization Release Amount": With respect to any
Distribution Date after the Stepdown Date on which a Trigger Event is not in
effect, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralization Amount for
such Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates on such Distribution
Date, over (ii) the Targeted Overcollateralization Amount for such Distribution
Date. With respect to any Distribution Date on which a Trigger Event is in
effect, the Overcollateralization Release Amount will be zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": Any of the Class AV-1 Pass-Through Rate, the
Class AV-2 Pass-Through Rate, the Class AV-3 Pass-Through Rate, the Class M-1
Pass-Through Rate, the Class M-2 Pass-Through Rate, the Class M-3 Pass-Through
Rate, the Class B-1 Pass-Through Rate, the Class B-2 Pass-Through Rate, the
Class B-3 Pass-Through Rate and the Class B-4 Pass-Through Rate. With respect to
the Class N Certificates, the Pass-Through Rate is 5.926% per annum.
With respect to the REMIC 2 Class X/N Interest and the REMIC A Class
X/N Interest and any Distribution Date, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (A) through (L) below, and the denominator of
which is the aggregate of the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest
LT1B3, REMIC 1 Regular Interest LT1B4 and REMIC 1 Regular Interest LT1ZZ. For
purposes of calculating the Pass-Through Rate for the REMIC 2 Class X/N Interest
and the REMIC A Class X/N Interest, the numerator is equal to the sum of the
following components:
(A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AA minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AA;
(B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AV1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AV1;
(C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AV2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AV2;
(D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1AV3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1AV3;
(E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M1;
(F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M2;
(G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1M3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1M3;
(H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B1 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B1;
(I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B2 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B2;
(J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1B3 minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B3; (K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1
Regular Interest LT1B4 minus the Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1B4; and
(L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT1ZZ minus the Marker Rate, applied to an amount equal to
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1ZZ.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class N, Class X or Residual Certificate), a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal Balance
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 Class N Notional Amount by the Original Class N Notional Amount of such
Class. 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 their respective commercial capacities) incorporated under the laws of
the United States of America or any state thereof and subject to
supervision and examination by federal and/or state authorities, so long
as, at the time of such investment or contractual commitment providing for
such investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in one of the two
highest available rating categories of S&P, Moody's and Dominion and the
highest available rating category of Fitch and provided that each such
investment has an original maturity of no more than 365 days and (B) any
other demand or time deposit or deposit which is fully insured by the
FDIC;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into
with a depository institution or trust company (acting as principal) rated
A or higher by S&P, Fitch and Dominion and rated A2 or higher by Moody's,
provided, however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and must (A)
be valued daily at current market prices plus accrued interest or (B)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by the Trustee in exchange for such collateral and (C) be
delivered to the Trustee or, if the Trustee is supplying the collateral,
an agent for the Trustee, in such a manner as to accomplish perfection of
a security interest in the collateral by possession of certificated
securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any State thereof and that are rated by each Rating Agency
in its highest long-term unsecured rating categories at the time of such
investment or contractual commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds registered under the Investment
Company Act of 1940 including funds managed or advised by the Trustee or
affiliates thereof having the highest rating category by the applicable
Rating Agency; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies in writing as a
permitted investment of funds backing securities having ratings equivalent
to its highest initial rating of the Class A Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate
other than a Disqualified Organization or a Disqualified 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.
"Pool Cap": With respect to any Distribution Date, a per annum rate
(adjusted by multiplying such rate by a fraction equal to 30 over the actual
number of days in the related Interest Accrual Period) equal to the Net Mortgage
Interest Rates for the Mortgage Loans (weighted on the basis of the Principal
Balances of the Mortgage Loans as of the first day of the related Collection
Period).
"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.
"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
the sum of (i) all collections and other amounts credited against the principal
balance of any such Mortgage Loan, (ii) the principal portion of Advances, (iii)
any Deficient Valuation and (iv) any principal reduction resulting from a
Servicer Modification. For purposes of this definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal Balance equal to the Principal Balance
of the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Distribution Amount": As to any Distribution Date, the
sum of (i) the Principal Remittance Amount minus, 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 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 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) the portion of all full and partial
Principal Prepayments or Insurance Proceeds and Subsequent Recoveries allocable
to principal received by the Servicer during the related Prepayment Period,
(iii) the Net Liquidation Proceeds allocable to principal actually collected by
the Servicer during the related Prepayment Period, (iv) with respect to
Defective Mortgage Loans repurchased with respect to such Prepayment Period, the
portion of the Purchase Price allocable to principal, (v) any Substitution
Adjustment Amounts allocable to principal received during the related Prepayment
Period and (vi) on the Distribution Date on which the Trust is to be terminated
in accordance with Section 10.01 hereof, that portion of the Termination Price
in respect of principal.
"Private Certificates": Any of the Class 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.
"Prospectus Supplement": That certain Prospectus Supplement dated
August 10, 2004 relating to the public offering of the Offered Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in the
case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, 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.
"Qualified Insurer": Any insurance company acceptable to Xxxxxx Mae
or Xxxxxxx Mac.
"Rating Agency or Rating Agencies": Fitch, Moody's, S&P and
Dominion, 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 plus
accrued and unpaid interest thereon at the Mortgage Interest Rate through the
last day of the month of liquidation, exceeds the amount of Net Liquidation
Proceeds applied to the principal balance of the related Mortgage Loan. With
respect to any Mortgage Loan, a Deficient Valuation or a reduction in the
Principal Balance thereof resulting from a Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization Amount, the Class B-1 Realized Loss
Amortization Amount, the Class B-2 Realized Loss Amortization Amount, the Class
B-3 Realized Loss Amortization Amount and the Class B-4 Realized Loss
Amortization Amount.
"Record Date": With respect to all of the Certificates (except for
the Class N, Class X, Class R and Class R-A Certificates), the Business Day
immediately preceding such Distribution Date; provided, however, that if any
such Certificate becomes a Definitive Certificate, the Record Date for such
Certificate shall be the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs. With respect to the
Class N, Class X, Class R and Class R-A Certificates, the last Business Day of
the month immediately preceding the month in which the related Distribution Date
occurs or the Closing Date, in the case of the first Distribution Date.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Trustee, (iii) that have been
designated as such by the Trustee, after consultation with the Servicer and (iv)
that are engaged in transactions in the London interbank market.
"Regular Certificate": Any of the Offered Certificates, the Class N
Certificates and the Class X Certificates.
"Reimbursement Amount": As defined in Section 2.03.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Servicemembers Civil Relief Act.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act or similar
state laws, the amount by which (i) interest collectible on such Mortgage Loan
during such Collection Period is less than (ii) one month's interest on the
Principal Balance of such Mortgage Loan at the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the application of the Relief Act or
similar state laws.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the sum of
the aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through Rate for REMIC
1 Regular Interest LT1AA minus the Marker Rate, divided by (b) 12.
"REMIC 1 Marker Allocation Percentage": 50% of any amount payable
from or loss attributable to the Mortgage Loans, which shall be allocated to
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest
LT1B3, REMIC 1 Regular Interest LT1B4 and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Overcollateralization Target Amount": 0.50% of the Targeted
Overcollateralization Amount.
"REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal Balances of
the REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular Interest
LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1
Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest
LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3 and REMIC
1 Regular Interest LT1B4, in each case as of such date of determination.
"REMIC 1 Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) 50% of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1 Regular Interest
LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1
Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular Interest
LT1B2, REMIC 1 Regular Interest LT1B3 and REMIC 1 Regular Interest LT1B4 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1
Regular Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3, REMIC 1 Regular
Interest LT1B4 and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Regular Interest LT1AA": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AA
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AV1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AV1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1AV2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AV2
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1AV3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1AV3
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M1
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interest LT1M2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1M3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1M3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B1": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B1
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B2": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B2
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B3": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B3
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1B4": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B4
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1XX": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1XX
shall accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.
"REMIC 1 Regular Interest LT1ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1ZZ
shall accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate
in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.
"REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1 Regular
Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2, REMIC 1 Regular Interest LT1B3, REMIC 1 Regular Interest LT1B4,
REMIC 1 Regular Interest LT1XX and REMIC 1 Regular Interest LT1ZZ.
"REMIC 1 Sub WAC Allocation Percentage": 50% of any amount payable
or loss attributable from the Mortgage Loans, which shall be allocated to REMIC
1 LT1XX.
"REMIC 2 Regular Interests": The Class AV-1, Class AV-2, Class AV-3,
Class M-1, Class M-2, Class M-3, Class B-1 and Class B-2 Certificates (exclusive
of the right of such Certificates to LIBOR Carryover Amounts), the REMIC 2 Class
X/N Interest, the REMIC 2 Class B-3 Interest and the REMIC 2 Class B-4 Interest.
"REMIC 2 Class B-3 Interest": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2, and which is held as an asset of REMIC B. The REMIC
2 Class B-3 Interest shall have a principal balance and Pass-Through Rate equal
to the principal balance and Pass-Through Rate of the Class B-3 Certificates.
"REMIC 2 Class B-4 Interest": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2, and which is held as an asset of REMIC C. The REMIC
2 Class B-4 Interest shall have a principal balance and Pass-Through Rate equal
to the principal balance and Pass-Through Rate of the Class B-4 Certificates.
"REMIC 2 Class X/N Interest": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
Regular Interest in REMIC 2, and which is held as an asset of REMIC A. The REMIC
2 Class X/N Interest shall accrue interest at its Pass- Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to the Class
X/N Uncertificated Principal Balance, as set forth in the Preliminary Statement
hereto.
"REMIC A Class X/N Interest": The separate non-certificated
beneficial ownership interests in REMIC A issued hereunder and designated as a
Regular Interest in REMIC A, which is represented by the Class X/N Interest in
the Grantor Trust and is beneficially owned by the Class N and Class X
Certificates. The REMIC A Class X/N Interest shall accrue interest at its
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to the Class X/N Uncertificated Principal Balance, as set
forth in the Preliminary Statement hereto (in all cases, subject to the
obligation of the REMIC A Class X/N Interest to pay LIBOR Carryover Amounts).
"REMIC Regular Interest": Any regular interest in REMIC 1, REMIC 2,
REMIC A, REMIC B or REMIC C.
"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 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.
"Reserve Account": The trust account created and maintained by the
Trustee pursuant to Section 3.04(f) which shall be entitled "Reserve Account,
JPMorgan Chase Bank, as Trustee, in trust for registered Holders of C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB5" and which must be an
Eligible Account. Amounts on deposit in the Reserve Account shall not be
invested. The Reserve Account shall not be an asset of any REMIC formed under
this Agreement.
"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 R-A 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, 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.
"Second Lien Mortgage Loan": Any of the of the Mortgage Loans which
are secured by a second mortgage lien that is junior to a first lien mortgage
loan on the related Mortgaged Property.
"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 Certificates": The Class AV-1, Class AV-2 and Class AV-3
Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Subordinated Certificates and (ii) the
Overcollateralization Amount, in each case before taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 37.70%.
"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 Modification": A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment of the Servicer, default is
reasonably foreseeable.
"Servicer Remittance Date": With respect to any Distribution Date,
one Business Day prior to 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 and (iv) compliance with the
obligations under Section 3.08.
"Servicing Fee": With respect to each Mortgage Loan (including each
REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per
annum.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Servicer to the Trustee and the Depositor on the Closing Date, as such list may
from time to time be amended.
"Servicing Rights Pledgee": One or more lenders, selected by the
Servicer, to which the Servicer will 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.
"Simple Interest Method": The method of allocating a payment to
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made and divided by either
360 or 365, as specified in the related Mortgage Note, and the remainder of such
payment is allocated to principal.
"Simple Interest Mortgage Loan": Any Mortgage Loan under which the
portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
"Special Hazard Loss": Any 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(c).
"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 later to occur of (x) the earlier to occur of
(A) the Distribution Date in August 2007 and (B) the Distribution Date on which
the aggregate Certificate Principal Balance of the Class A Certificates is
reduced to zero, and (y) 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.
"Subordinated Certificates": The Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3, Class B-4, Class N, Class X, Class R and Class
R-A Certificates.
"Subsequent Recovery": Any amount (net of reimbursable expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 3.35% of the Pool Balance on the Cut-off
Date and (y) on and after the Stepdown Date, (i) if a Trigger Event has not
occurred, the lesser of (a) 3.35% of the Pool Balance on the Cut-off Date and
(b) the greater of (A) 6.70% of the Pool Balance as of the last day of the
related Collection Period and (B) 0.50% of the Pool Balance on the Cut-off Date
and (ii) if a Trigger Event has occurred, the Targeted Overcollateralization
Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the four REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Moneyline Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i) the
six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 43% of
the Senior Enhancement Percentage or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period (reduced by the aggregate amount of Subsequent Recoveries
received since the Cut-off Date through the last day of the related Collection
Period) divided by the Pool Balance as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ----------
August 2007 through July 2008 4.00%
August 2008 through July 2009 6.00%
August 2009 through July 2010 7.75%
August 2010 through July 2011 8.25%
August 2011 and thereafter 8.50%
"Trust": 2004-CB5 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 four 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), (v) the Trustee's
rights under the Yield Maintenance Agreement and (vi) the Collection Account,
the Distribution Account, the Reserve Account 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": JPMorgan Chase Bank, a New York banking corporation, or
any successor Trustee appointed as herein provided.
"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, 0.0075%
per annum.
"Uncertificated Accrued Interest": With respect to each REMIC 1
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated REMIC 1 Pass-Through Rate on the
Uncertificated Principal Balance of such REMIC Regular Interest. In each case,
Uncertificated Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls (allocated to such REMIC Regular
Interests based on their respective entitlements to interest irrespective of any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution Date).
"Uncertificated Principal Balance": The amount of any REMIC 1
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each REMIC 1 Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
uncertificated balance. On each Distribution Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall be reduced by all distributions
of principal made on such REMIC 1 Regular Interest on such Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and appropriate,
shall be further reduced on such Distribution Date by Realized Losses as
provided in Section 4.08(b) and shall be increased by all Subsequent Recoveries
allocated to such REMIC I Regular Interest on such Distribution Date pursuant to
Section 4.08. The Uncertificated Balance of REMIC 1 Regular Interest LT1ZZ shall
be increased by interest deferrals as provided in Section 4.08(a)(i). The
Uncertificated Balance of each REMIC 1 Regular Interest shall never be less than
zero.
"Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular Interest
LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1
Regular Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest
LT1B3, REMIC 1 Regular Interest LT1B4, REMIC 1 Regular Interest LT1ZZ and REMIC
1 Regular Interest LT1XX, the Weighted Average Net Mortgage Rate of the Mortgage
Loans.
"Underwriters": Banc of America Securities LLC and WaMu Capital
Corp., as underwriters with respect to the Offered Certificates.
"United States Person" or "U.S. Person": (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated as
a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
provide otherwise) or (iii) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in Treasury regulations, certain
Trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons will also be a U.S. Person ; provided, that for purposes of the
definition of a "Permitted Transferee," a U.S. Person shall not include any
person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other Person.
"Unpaid Realized Loss Amount": For any Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates and as to any
Distribution Date, the excess of (x) the cumulative amount of related Applied
Realized Loss Amounts with respect to such Class for all prior Distribution
Dates over (y) the sum of (a) the cumulative amount of any Subsequent Recoveries
allocated to such Class and (b) the aggregate Realized Loss Amortization Amounts
with respect to such Class for all prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the lower of 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 shall be 98%, and shall be allocated
among each such Class according to the fraction, expressed as a percentage, the
numerator of which is the aggregate Certificate Principal Balance of all the
Certificates of such Class then outstanding and the denominator of which is the
aggregate Certificate Principal Balance of all the Offered Certificates then
outstanding. The Voting Rights allocated to each such Class of Certificates
shall be allocated among all holders of each such Class in proportion to the
outstanding Certificate Principal Balance of such Certificates; provided,
however, that any Certificate registered in the name of the Servicer, the
Depositor or the Trustee or any of their respective affiliates shall not be
included in the calculation of Voting Rights; provided that only such
Certificates as are known by a Responsible Officer of the Trustee to be so
registered will be so excluded. On each Distribution Date (a) prior to the date
on which the Notional Amount of the Class N Certificates is reduced to zero, the
percentage of all the Voting Rights allocated among the Holders of the Class N
and Class X Certificates, respectively, shall be 1% and (b) on and after the
date on which the Notional Amount of the Class N Certificates is reduced to
zero, the percentage of all the Voting Rights allocated among the Holders of the
Class N Certificates shall be 0% and the percentage of all the Voting Rights
allocated among the Holder of the 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.
"Yield Maintenance Agreement": The interest rate cap agreement
between the Trustee, on behalf of the Trust, and the Yield Maintenance Agreement
Provider substantially in the form attached hereto as Exhibit S. The Yield
Maintenance Agreement shall not be an asset of any REMIC formed under this
Agreement.
"Yield Maintenance Agreement Payment": On each Distribution Date
through the Distribution Date in August 2006, the amount equal to the product of
(a) the excess of the lesser of (i) LIBOR and (ii) ceiling rate over the strike
rate for such Distribution Date, both as set forth on the schedule attached to
the confirmation to the Yield Maintenance Agreement for such Distribution Date,
(b) the product of 100 and the cap notional amount, as set forth on the schedule
attached to the confirmation to the Yield Maintenance Agreement for such
Distribution Date and (c) a fraction, the numerator of which is the actual
number of days elapsed since the previous Distribution Date to but excluding the
current Distribution Date and the denominator of which is 360.
"Yield Maintenance Agreement Provider": The Bank of New York, and
any successor thereto.
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) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all proceeds of any of
the foregoing; (v) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, and (vi) all other assets included or to be included in the Trust
Fund; provided, however, so long as the Servicer is an FHA Approved Mortgagee,
the Servicer shall remain mortgagee of record with respect to any Mortgage Loan
that is an FHA Loan and the Commissioner of HUD shall have no obligation to
recognize or deal with any person other than the Servicer with respect to FHA
Insurance. Such assignment includes all interest and principal due to the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage
Loans.
It is agreed and understood by the parties hereto that it is not
intended that any mortgage loan be included in the Trust that is a "High-Cost
Home Loan" as defined in either (i) the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) the New Mexico Home Loan Protection Act effective
January 1, 2004.
In connection with such transfer and assignment, the Seller, on
behalf of the Depositor, does hereby deliver to, and deposit with the Trustee,
or its designated agent (the "Custodian"), the following documents or
instruments with respect to each 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 JPMorgan Chase Bank, as
Trustee under the Pooling and Servicing Agreement, dated as of July
1, 2004, among Credit-Based Asset Servicing and Securitization LLC,
Asset Backed Funding Corporation, Xxxxxx Loan Servicing LP and
JPMorgan Chase Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB5, 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 "JPMorgan Chase Bank, as Trustee under the
Pooling and Servicing Agreement, dated as of July 1, 2004, among
Credit-Based Asset Servicing and Securitization LLC, Asset Backed
Funding Corporation, Xxxxxx Loan Servicing LP and JPMorgan Chase
Bank, C-BASS Mortgage Loan Asset-Backed Certificates, Series
2004-CB5, without recourse";
(iv) an original or copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance policy
except with respect to those Mortgage Loans identified on Exhibit V
hereto;
(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 Mortgage Loan secured by Co-op Shares, the originals of
the following documents or instruments:
a. The stock certificate;
b. The stock power executed in blank;
c. The executed proprietary lease;
d. The executed recognition agreement;
e. The executed assignment of recognition agreement, if
any;
f. The executed UCC-1 financing statement with evidence of
recording thereon; and
g. Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law,
evidencing a complete and unbroken line from the
mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
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.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in the
case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing Date,
in the case of missing Mortgages or Assignments or deliver such missing document
to the Trustee or the Custodian. If the Seller does not cure such defect or
deliver such missing document within such time period, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with Section 2.03.
The Servicer shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv)
hereof to be recorded; provided, however, the Servicer need not cause to be
recorded any Assignment which relates to a Mortgage Loan in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel delivered by the
Servicer to the Trustee and the Rating Agencies, the recordation of such
assignment is not necessary to protect the Trustee's interest, on behalf of the
Trust, in the related Mortgage Loan. The Servicer shall be required to deliver
such assignments for recording within 30 days of the Closing Date. The Servicer
shall furnish the Trustee, or its designated agent, with a copy of each
assignment of Mortgage submitted for recording. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Servicer shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded. In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date the Servicer shall cause
to be completed such endorsements "Pay to the order of JPMorgan Chase Bank, as
Trustee under the Pooling and Servicing Agreement, dated as of July 1, 2004,
among Credit-Based Asset Servicing and Securitization LLC, Asset Backed Funding
Corporation, Xxxxxx Loan Servicing LP and JPMorgan Chase Bank, C-BASS Mortgage
Loan Asset-Backed Certificates, Series 2004-CB5, without recourse."
The Depositor herewith delivers to the Trustee executed copies of
the Mortgage Loan Purchase Agreement.
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 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
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
and (iii) based on its examination and only as to the foregoing, the information
set forth in the Mortgage Loan Schedule that corresponds to items (1), (2), (3),
(5), (13) and (25) (in the case of (25), only as to whether there is a
prepayment penalty) of the Mortgage Loan Schedule accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee (or the Custodian, as applicable) is under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
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 shall so notify the Seller, the
Depositor and the Servicer. In addition, upon the discovery by the Seller,
Depositor, the Trustee or the Servicer (or upon receipt by the Trustee of
written notification of such breach) of a breach of any of the representations
and warranties made by the Seller in the related Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Certificateholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
The Trustee is hereby directed to execute, deliver and perform its
obligations under the Yield Maintenance Agreement on the Closing Date and
thereafter on behalf of the Holders of the Offered Certificates (other than the
Class B-3 and Class B-4 Certificates). The Seller, the Servicer, the Depositor
and the Certificateholders by acceptance of their Certificates acknowledge and
agree that the Trustee shall execute, deliver and perform its obligations under
the Yield Maintenance Agreement and shall do so solely in its capacity as
Trustee of the Trust Fund and not in its individual capacity.
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, the Servicer and the Trustee 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 cause the
Seller to repurchase such Mortgage Loan from the Trust Fund at the Purchase
Price on or prior to the Determination Date following the expiration of such 120
day period (subject to Section 2.03(e)); provided that, in connection with any
such breach that could not reasonably have been cured within such 120 day 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 the case of a breach of the Seller's
representation set forth in Section 3.01(f) or 3.01(zz) 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 the violation of such law (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 such costs and
damages. It is understood and agreed that the obligation of the Seller to pay
the Reimbursement Amount and to either cure or repurchase (or 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 and 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 a 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 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 formed under this Agreement 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 discovery of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a), if made by the Seller. The Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files pursuant to
Sections 2.01, 2.02 and 2.03 and preparation and delivery of the certifications
in the form of Exhibit F-1 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 the Seller's underwriting standards
or some assessment of the Mortgagor's ability to repay the Modified Mortgage
Loan.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Depositor, the Seller,
the Servicer 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 Section
2.03(a) to cure, substitute for or repurchase a Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement and to reimburse the Trust the Reimbursement
Amount, constitute the sole remedies available 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 and is an FHA Approved Mortgagee in good
standing to service mortgages and has not been suspended as a mortgagee or
servicer by the FHA and has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans. The Servicer is, and shall remain for as long
as it is servicing the Mortgage Loans hereunder, in good standing as a FHA
Approved Mortgagee and servicer of mortgage loans for HUD, Xxxxxx Mae or
Xxxxxxx Mac, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to
comply with HUD, Xxxxxx Mae or Xxxxxxx Mac or FHA eligibility requirements
or which would require notification to any of HUD, Xxxxxx Mae, Xxxxxxx Mac
or FHA;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and
will constitute valid, legal and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy laws and
general principles of equity;
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions 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, and shall continue to fully
furnish for so long as it is servicing the Mortgage Loans hereunder, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on the Mortgagor credit
files to Equifax, Experian and Trans Union Credit Information Company 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 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 incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its assets and conduct its
business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Depositor is a party or by which it or its
properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or business
of the Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement by
the Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or violation of
any of the terms or provisions of, or, to the knowledge of the Depositor,
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Depositor is a
party or by which the Depositor is bound or to which any of the property
or assets of the Depositor is subject, nor will such actions result in any
violation of the provisions of the certificate of incorporation or by-laws
of the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such conflicts,
breaches, violations and defaults as would not have a material adverse
effect on the ability of the Depositor to perform its obligations under
this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body of the United States or any other jurisdiction is required for the
issuance of the Certificates, or the consummation by the Depositor of the
other transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as (a) may be
required under State securities or Blue Sky laws, (b) have been previously
obtained or (c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations pending
before or, to the Depositor's knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a party
or of which any of its properties is the subject: (a) which if determined
adversely to the Depositor would have a material adverse effect on the
business, results of operations or financial condition of the Depositor;
(b) asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation by
the Depositor of any of the transactions contemplated by this Agreement,
as the case may be; (d) which might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the 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, Class R and
Class R-A Certificates are issuable only in minimum Percentage Interests of 10%.
The Trustee acknowledges the issuance of the uncertificated REMIC 1 Regular
Interests and declares that it hold such regular interests as assets of REMIC 2.
The Trustee acknowledges the issuance of the uncertificated REMIC 2 Class X/N
Interest and declares that it hold such regular interest as the asset of REMIC
A. The Trustee acknowledges the issuance of the uncertificated REMIC 2 Class B-3
Regular Interest and declares that it hold such regular interest as the asset of
REMIC B. The Trustee acknowledges the issuance of the uncertificated REMIC 2
Class B-4 Regular Interest and declares that it hold such regular interest as
the asset of REMIC C. The Trustee acknowledges that it holds the REMIC A Class
X/N Interest as an asset of the Grantor Trust, which Grantor Trust will issue
the Class X/N Interest, subject to the obligation thereof to pay LIBOR Carryover
Amounts on behalf of the Holders of the Offered Certificates. In addition to the
assets described in the preceding sentence, the assets of the Grantor Trust
shall also include the Yield Maintenance Agreement, the Reserve Account and the
beneficial interest of the Class X/N Interest with respect thereto, subject to
the obligation to pay LIBOR Carryover Amounts. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.
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 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
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any lien on any
Mortgage Loan, or any interest therein; the Seller will notify the Trustee, as
assignee of the Depositor, of the existence of any lien on any Mortgage Loan
immediately upon discovery thereof, and the Seller will defend the right, title
and interest of the Trust, as assignee of the Depositor, in, to and under the
Mortgage Loans, against all claims of third parties claiming through or under
the Seller; provided, however, that nothing in this Section 2.09 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, taking all actions that a mortgagee is
permitted or required to take by the FHA (the "Servicing Standards").
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Certificateholders; provided, however, that the Servicer shall not make future
advances and (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) the Servicer shall not permit any modification with respect to any
Mortgage Loan that would (i) change the Mortgage Interest Rate, defer or forgive
the payment thereof of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or extend
the final maturity date with respect to such Mortgage Loan, (ii) in the case of
FHA Loans, affect the FHA Insurance Contract with respect to such Mortgage Loan,
(iii) affect adversely the status of any REMIC constituting part of the Trust
Fund as a REMIC or (iv) cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Notwithstanding the foregoing, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would both (x) effect an exchange or
reissuance of such Mortgage Loan under Section 1.860G-2(b) of the Treasury
Regulations and (y) cause any REMIC constituting part of the Trust Fund to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
Provisions. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. The Servicer shall make all required Servicing Advances and
shall service and administer the Mortgage Loans in accordance with Applicable
Regulations, and shall provide to the Mortgagors 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
annexed hereto as Exhibit W) and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
In servicing and administering FHA Loans, the Servicer shall comply
strictly with the National Housing Act, the FHA Regulations and the Servicemen's
Readjustment Act 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 and the FHA Insurance
Contracts and the Certificateholders' reliance on the Servicer.
The Servicer shall give prompt notice to the Trustee of any action,
of which the Servicer has actual knowledge, which action purports to (i) assert
a claim against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.
Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may not
waive any prepayment penalty or portion thereof required by the terms of the
related Mortgage Note unless (i) the related Mortgage Loan is in default or
foreseeable default and such waiver (a) is standard and customary in servicing
mortgage loans similar to the Mortgage Loans and (b) the Servicer determines
that such waiver would maximize recovery of Liquidation Proceeds for such
Mortgage Loan, taking into account the value of such prepayment penalty, (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 penalty. 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 third Business Day following the
immediately succeeding Determination Date with a copy to the Class X
Certificateholder. If the Servicer has waived or does not collect all or a
portion of a prepayment penalty 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 penalty (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 received with respect to prepayment penalties.
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 Mortgage Interest Rate up to 50 basis points.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs and
consistent with Applicable Regulations and the servicing standards set forth in
the Xxxxxx Xxx Guide, including, without limitation, advancing funds for the
payment of taxes and insurance premiums with respect to first lien Mortgage
Loans.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust Fund would be 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, Distribution Account and Reserve
Account.
(a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts. Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account on a daily
basis within two Business Days of receipt, and retain therein, the following
payments and collections received or made by it after the Cut-off Date with
respect to the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all proceeds from a Cash Liquidation and any 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
penalties, 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. Amounts in
the Distribution Account shall be deemed to be held on behalf of the related
REMICs and the Grantor Trust in accordance with the REMIC distributions set
forth in Section 4.08.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Permitted Investments in accordance with the provisions set forth
in Section 3.25. The Servicer shall give notice to the Trustee certifying the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trustee shall give notice to the Servicer and the
Depositor of the location of the Distribution Account when established and prior
to any change thereof.
(d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any prepayment penalties or amounts in connection with the
waiver of such prepayment penalties, in each case required to be deposited
pursuant to Section 3.01;
(iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 2.03, 3.04, 3.15, 3.16, 3.23 or 4.07; and
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own
funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall notify the Servicer of such receipt and deposit such funds in
the Distribution Account, subject to withdrawal thereof as permitted hereunder.
In addition, the Trustee shall deposit in the Distribution Account any amounts
required to be deposited pursuant to Section 3.25(b) in connection with losses
realized on Permitted Investments with respect to funds held in the Distribution
Account.
(f) (i) The Trustee shall establish and maintain the Reserve
Account, held in trust for the benefit of the Holders of the Offered
Certificates (other than the Class B-3 and Class B-4 Certificates). The Trustee
shall deposit in the Reserve Account on the date received by it, any Yield
Maintenance Agreement Payment received from the Yield Maintenance Agreement
Provider for the related Distribution Date. On each Distribution Date, the
Trustee shall withdraw from the Reserve Account any Yield Maintenance Agreement
Payment and apply it in the following order of priority:
(A) concurrently, to the Offered Certificates (other than the
Class B-3 and Class B-4 Certificates), any remaining unpaid LIBOR
Carryover Amounts for such Classes for such Distribution Date (after
distributions pursuant to Section 4.02(b)(xxvi) hereof), pro rata;
and
(B) to the Trustee as additional compensation, any remaining
amount on deposit in the Reserve Account.
(ii) The Trustee shall account for the Reserve Account as an asset
of a grantor trust under subpart E, part I of subchapter J of the Code and
not an asset of any REMIC created pursuant to this Agreement. The
beneficial owner of the Reserve Account is the Holder of the Class X/N
Interest. For all federal tax purposes, amounts transferred or reimbursed
by REMIC A to the Reserve Account shall be treated as distributions by the
Trustee to the Holders of the Class X/N Interest.
(iii) Any LIBOR Carryover Amounts paid by the Trustee pursuant to
this Section 3.04(f) to the Offered Certificates shall be accounted for by
the Trustee as amounts paid first to the Holder of the Class X/N Interest
and then to the respective Class or Classes of Offered Certificates. In
addition, the Trustee shall account for the Offered Certificates' rights
to receive payments of LIBOR Carryover Amounts as rights in a limited
recourse interest rate cap contract written by the Holders of the Class
X/N Interest in favor of the Offered Certificates.
(iv) For federal tax return and information reporting, the right of
the Holders of the Offered Certificates (other than the Class B-3 and
Class B-4 Certificates) to receive payments under the Yield Maintenance
Agreement in respect of any Yield Maintenance Agreement Payments shall be
assigned a value of zero.
Section 3.05 Permitted Withdrawals From the Collection Account.
The Servicer may, from time to time, withdraw from the Collection
Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to clause (ii) of first sentence of
the second paragraph of Section 4.07(b);
(ii) to reimburse itself for (a) Advances and Servicing Advances to
the extent of amounts received on the related Mortgage Loan which
represent payments of (x) principal and/or interest respecting which any
such Advance was made or (y) Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds respecting which any such Servicing Advance was made;
or (b) any unreimbursed Advances to the extent of funds held in the
Collection Account for future distribution that were not included in
Available Funds for the preceding Distribution Date; provided, however,
any funds so applied will be replaced by the Servicer by deposit in the
Collection Account no later than one Business Day prior to the
Distribution Date on which such funds are required to be distributed;
(iii) to reimburse itself for unreimbursed Servicing Advances, any
unpaid Servicing Fees and for unreimbursed Advances to the extent that
such amounts are deemed to be Nonrecoverable Advances and to reimburse
itself for such amounts to the extent that such amounts are nonrecoverable
from the disposition of REO Property or have been written-off pursuant to
Section 3.13;
(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) and to
reimburse itself as set forth in Section 9.01(c); and
(vii) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Account; 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 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 the status of Primary Insurance Policy premiums and
fire, flood and hazard insurance coverage and shall obtain, from time to time,
all bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or Applicable Regulations.
To the extent that a Mortgage does not provide for Escrow Payments, the Servicer
shall (i) 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)
ensure that all insurance required to be maintained on the Mortgaged Property
pursuant to this Agreement is maintained. If any such payment has not been made
and the Servicer receives notice of a tax lien with respect to the Mortgage Loan
being imposed, the Servicer will, promptly and 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.
The Servicer, on behalf of the Trustee, as mortgagee, will maintain
in full force and effect (to the extent a Mortgage Loan has a Primary Insurance
Policy) a Primary Insurance Policy issued by a Qualified Insurer with respect to
each Mortgage Loan for which such coverage is required. Such coverage will be
maintained until the Combined Loan-to-Value Ratio of the related Mortgage Loan
is reduced to 80% or less. The Servicer will not cancel or refuse to renew any
Primary Insurance Policy in effect on the Closing Date that is required to be
kept in force under this Agreement unless a replacement Primary Insurance Policy
for such cancelled or non-renewed policy is obtained from and maintained with a
Qualified Insurer. The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Section 3.14, the Servicer shall promptly notify the
insurer under the related Primary Insurance Policy, if any, of such assumption
or substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under the Primary Insurance Policy. If such Primary
Insurance Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement Primary Insurance Policy as
provided above.
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 regulations. If the Mortgaged Property is in
an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the Principal Balance of
the Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on the REO Property for the benefit of the Certificateholders, (x)
fire and hazard insurance with extended coverage in an amount which is at least
equal to the replacement cost of the improvements which are a part of such
property, (y) public liability insurance and, (z) to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.05. It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by the
Servicer or the Mortgagor or maintained on property acquired in respect of the
Mortgage Loan, other than pursuant to such Applicable Regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Servicer and shall provide for at least thirty days prior written notice of
any cancellation, reduction in the amount of or material change in coverage to
the Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a general policy rating of
B:VI or better in Best's Key Rating Guide and are licensed to do business in the
state wherein the property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket
policy issued by an insurer that has a general policy rating of B:VI or better
in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal to
the amount required pursuant to Section 3.10 and otherwise complies with all
other requirements of Section 3.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 3.10, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond (the "Fidelity Bond") and an errors and omissions insurance policy, with
broad coverage with financially responsible companies on all officers, employees
or other persons acting in any capacity with regard to the Mortgage Loans to
handle funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond and errors and omissions insurance shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Xxxxxx 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 requesting party a certified true copy of the Fidelity Bond and errors and
omissions insurance policy and a statement from the surety and the insurer that
such Fidelity Bond and errors and omissions insurance policy shall in no event
be terminated or materially modified without thirty days' prior written notice
to the Trustee.
Section 3.13 Title, Management and Disposition of REO Property and
Certain Delinquent Mortgage Loans.
(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 part of the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding, in which case the Trust Fund may continue
to hold such REO Property (subject to any conditions contained in such Opinion
of Counsel). The Servicer shall be entitled to be reimbursed from the Collection
Account for any costs incurred in obtaining such Opinion of Counsel, as provided
in Section 3.05.
Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC constituting part of
the Trust Fund to the imposition of any federal income taxes on the income
earned from such REO Property, including any taxes imposed by reason of Sections
860F or 860G(c) of the Code, unless the Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under 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 or the related Mortgage Loan, 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.
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).
(c) The Servicer may write-off any Second Lien Mortgage Loan that
has been Delinquent for a period of 180 days or more.
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 Mortgaged Property shall be
conveyed and releasing the original Mortgagor from liability would be in the
best interests 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 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 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, 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 servicer prior to the Servicer.
Section 3.16 Optional Purchases and Sales of Mortgage Loans by
Servicer.
The Servicer (or an affiliate of the Servicer) may, at its option,
repurchase a Mortgage Loan or REO Property which becomes 120 or more days
Delinquent or for which the Servicer has accepted a deed in lieu of foreclosure,
during the period commencing on the first day of the calendar quarter succeeding
the calendar quarter in which the Initial Delinquency Date occurred with respect
to such Mortgage Loan and ending on the last Business Day of such calendar
quarter. If the Servicer (or an affiliate of the Servicer) does not exercise its
purchase right with respect to a Mortgage Loan during the period specified in
the preceding sentence, such Mortgage Loan shall thereafter again become
eligible for purchase pursuant to the preceding sentence only after the Mortgage
Loan ceases to be 120 days or more Delinquent and thereafter becomes 120 days
Delinquent again. The "Initial Delinquency Date" of a Mortgage Loan shall mean
the date on which the Mortgage Loan first became 120 days Delinquent. Prior to
repurchase pursuant to this Section 3.16, the Servicer shall be required to
continue to make monthly advances pursuant to Section 4.07. The Servicer shall
not use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The Servicer
shall purchase such (i) delinquent Mortgage Loan at a price equal to the
Principal Balance of the Mortgage Loan plus accrued interest thereon at the
Mortgage Interest Rate from the date to which interest has last been paid to the
Trust Fund to the date of purchase plus any unreimbursed Servicing Advances and
Advances or (ii) REO Property at its fair market value as determined in good
faith by the Servicer. Any such repurchase of a Mortgage Loan or REO Property
pursuant to this Section 3.16 shall be accomplished by delivery to the Trustee
for deposit in the Distribution Account of the amount of the purchase price. The
Trustee shall immediately effectuate the conveyance of such delinquent Mortgage
Loan or REO Property to the Servicer to the extent necessary, including the
prompt delivery of all documentation to the Servicer.
Section 3.17 Trustee to Cooperate; Release of Files.
(a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee (or the Custodian as the case may be) two executed copies of a completed
"Request for Release" in the form of Exhibit E. Upon receipt of such Request for
Release of Documents, the Trustee (or the Custodian as the case may be) shall
promptly release the related Mortgage File, in trust to (i) the Servicer, or
(ii) such other party identified in the related Request for Release. Upon any
such payment in full, or the receipt of such notification that such funds have
been placed in escrow, the Servicer shall direct the Trustee in writing to
execute an instrument of satisfaction (or assignment of Mortgage without
recourse) regarding the Mortgaged Property relating to such Mortgage, which
instrument of satisfaction or assignment, as the case may be, shall be delivered
to the Person or Persons entitled thereto against receipt therefor of payment in
full, it being understood and agreed that no expense incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
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 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,
real-estate referral fees or any other service-related fees, Insurance Proceeds
and Liquidation Proceeds not required to be deposited in the Collection Account
or the Distribution 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 year commencing in 2005, a
Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during such preceding fiscal 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 are
entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Not later than March 15th of each year commencing in 2005, the
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Trustee and the
Depositor a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in either the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America or the Audit Program for Mortgages serviced by Xxxxxxx
Mac, with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination conducted
by such firm in accordance with standards established by the American Institute
of Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. 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 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 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 Reserved.
Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.
Not later than the close of business on each Servicer Remittance
Date, the Servicer shall deliver to the Trustee for deposit in the Distribution
Account an amount ("Compensating Interest") equal to the lesser of (A) the
aggregate of the Prepayment Interest Shortfalls on the Actuarial Mortgage Loans
for the related Distribution Date resulting from Principal Prepayments on the
Actuarial 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 Actuarial Mortgage Loans. The Servicer shall not have the right to
reimbursement for any amounts remitted to the Trustee in respect of Compensating
Interest. Such amounts so remitted shall be included in the Available Funds and
distributed therewith on the next Distribution Date. The Servicer shall not be
obligated to pay Compensating Interest with respect to Prepayment Interest
Shortfalls on Simple Interest Mortgage Loans or Relief Act Interest Shortfalls.
Section 3.24 Obligations of the Servicer in Respect of Mortgage
Interest Rates and Monthly Payments.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances that were made
by the Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Servicer may direct any depository institution maintaining
the Collection Account 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. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in the Collection
Account shall be made in the name of the Trustee or the Servicer, as applicable
(in its capacity as such) or in the name of a nominee of the Trustee. The
Trustee shall be entitled to sole possession (except with respect to investment
direction of funds held in the Collection Account) over each such investment and
the income thereon, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee or its nominee. 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.
(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. Funds on deposit in the Distribution Account will
remain uninvested.
(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.
Except as set forth in clause (b) above with respect to the
Distribution Account, 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, 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.
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.
Section 3.29 Periodic Filings.
(a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Exchange Act. Without limiting the generality of the foregoing, the
Trustee shall prepare on behalf of the Trust any monthly Current Reports on Form
8-K (each, a "Monthly Form 8-K") and Annual Reports on Form 10-K customary for
similar securities as required by the Exchange Act and the rules and regulations
of the Securities and Exchange Commission thereunder, and the Trustee shall sign
(other than any Annual Reports on Form 10-K) and file (via the Securities and
Exchange Commission's Electronic Data Gathering and Retrieval System) such forms
on behalf of the Trust. The Servicer shall sign any Annual Reports on Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date (commencing on the Distribution Date occurring
in August 2004 and ending with the Distribution Date following the filing of the
Form 15 Suspension Notification as set forth in Section 3.29(h) hereof),
including a copy of the statement set forth in Section 4.06(a) hereof 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 Securities
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. If they are not so
timely delivered, the Trustee shall file an amended Form 10-K including such
documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit S (the "Certification"), which shall be signed by the senior
officer of the Servicer in charge of servicing.
(c) The Trustee shall sign a certification (in the form attached
hereto as Exhibit T) for the benefit of the Servicer and its officers, directors
and Affiliates (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K). 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), the Trustee shall deliver
to the Servicer (i) such certification and (ii) a completed Form 10-K to be
executed by the Servicer. 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), the
Servicer shall deliver the signed Form 10-K and the signed Certification to be
filed to the Trustee. In addition, the Trustee shall indemnify and hold harmless
the Servicer and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of
the Trustee's failure to deliver the certification (in the form attached hereto
as Exhibit T) pursuant to this Section 3.29(c) or any inaccuracy in such
certification, other than any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of the Servicer's breach of its obligations under this
Agreement. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Servicer and its officers, directors and
Affiliates, then the Trustee shall contribute to the amount paid or payable by
the Servicer, its officers, directors or Affiliates as a result of the losses,
claims, damages or liabilities of the Servicer, its officers, directors or
Affiliates in such proportion as is appropriate to reflect the relative fault of
the Servicer and its officers, directors and Affiliates on the one hand and the
Trustee on the other.
(d) The Servicer shall indemnify and hold harmless the Trustee and
its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Servicer's
failure to sign and deliver either the Certification or the Form 10-K within the
time frame provided in Section 3.29(c), other than any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Trustee's
breach of its obligations under this Agreement. If the indemnification provided
for herein is unavailable or insufficient to hold harmless the Trustee and its
officers, directors and Affiliates, then the Servicer shall contribute to the
amount paid or payable by the Trustee, its officers, directors or Affiliates as
a result of the losses, claims, damages or liabilities of the Trustee, its
officers, directors or Affiliates in such proportion as is appropriate to
reflect the relative fault of the Trustee and its officers, directors and
Affiliates on the one hand and the Servicer on the other.
(e) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or regulations, or if
other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.29, to be conducted differently than as described,
the Depositor, Servicer and Trustee 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 shall
be made in accordance with the first paragraph of Section 11.01 without further
consent of the Certificateholders and without the requirement to deliver (i)
notice in writing to the Depositor, the Servicer and the Trustee from the Rating
Agencies that such action will not result in the reduction or withdrawal of the
rating of any outstanding Class of Certificates with respect to which it is a
Rating Agency, or (ii) an Opinion of Counsel delivered to the Servicer and the
Trustee. Such amendment may result in the reduction of the reports filed by the
Trustee on behalf of the Trust under the Exchange Act. Notwithstanding the
foregoing, none of the Depositor, Servicer or Trustee shall be obligated to
enter into any amendment pursuant to this Section 3.29 that adversely affects
its obligations and immunities under this Agreement.
(f) In filing any Monthly Form 8-K or Form 10-K, the Trustee shall
not undertake any analysis of, and shall have no responsibility for, any
financial information, accountant's report, certification or other matter
contained therein, except for computations performed by the Trustee and
reflected in the statement set forth in Section 4.06(a) hereof.
(g) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor and the Servicer a copy of any
such executed report, statement or information.
(h) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
and the calculations required to be made by the Trustee, to the extent
available:
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) concurrently, to the Class AV-1, Class AV-2 and Class AV-3
Certificates, pro rata, the applicable Accrued Certificate Interest
thereon for such Distribution Date;
(iii) concurrently, to the Class AV-1, Class AV-2 and Class AV-3
Certificates, pro rata, the applicable Interest Carry Forward Amount for
such Distribution Date for the Class AV-1, Class AV-2 and Class AV-3
Certificates;
(iv) to the Class M-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(v) to the Class M-2 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vi) to the Class M-3 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vii) to the Class B-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ix) to the Class B-3 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and
(x) to the Class B-4 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and
(xi) the amount, if any, of the Interest Remittance Amount remaining
after application with respect to the priorities set forth above will be
applied as described under Section 4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) On each Distribution Date, the Trustee shall make the following
distributions in the following order of priority (based upon the Mortgage Loan
information provided to it in the Remittance Report), and the calculations
required to be made by the Trustee, to the extent of the Principal Distribution
Amount:
(i) before the Stepdown Date or with respect to which a Trigger
Event is in effect, sequentially, as follows:
(A) sequentially, to the Class AV-1, Class AV-2 and Class AV-3
Certificates, in that order, until the Certificate Principal
Balances thereof have been reduced to zero;
(B) to the Holders of the Class M-1 Certificates, 100% of the
remaining Principal Distribution Amount for such Distribution Date,
until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero;
(C) to the Holders of the Class M-2 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced to
zero;
(D) to the Holders of the Class M-3 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced to
zero;
(E) to the Holders of the Class B-1 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class B-1 Certificates has been reduced to
zero;
(F) to the Holders of the Class B-2 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class B-2 Certificates has been reduced to
zero; and
(G) to the Holders of the Class B-3 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class B-3 Certificates has been reduced to
zero; and
(H) to the Holders of the Class B-4 Certificates, 100% of the
remaining Principal Distribution Amount, until the Certificate
Principal Balance of the Class B-4 Certificates has been reduced to
zero; and
(I) any amount of the Principal Distribution Amount remaining
after making all of the distributions in clauses (A), (B), (C), (D),
(E), (F), (G) and (H) shall be applied as set forth in Section
4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event is
not in effect:
(A) sequentially, to the Class AV-1, Class AV-2 and Class
AV-3, in that order, up to the Class A Principal Distribution Amount
until the Certificate Principal Balances thereof have been reduced
to zero;
(B) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates in clause (A) above and (y) the Class M-1
Principal Distribution Amount will be distributed to the Class M-1
Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(C) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates in clause (A) above and the amount
distributed to the Class M-1 Certificates in clause (B) above and
(y) the Class M-2 Principal Distribution Amount will be distributed
to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(D) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates in clause (A) above, the amount distributed
to the Class M-1 Certificates in clause (B) above and the amount
distributed to the Class M-2 Certificates in clause (C) above and
(y) the Class M-3 Principal Distribution Amount will be distributed
to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(E) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates pursuant to clause (A) above, the amount
distributed to the Class M-1 Certificates pursuant to clause (B)
above, the amount distributed to the Class M-2 Certificates pursuant
to clause (C) above and the amount distributed to the Class M-3
Certificates pursuant to clause (D) above and (y) the Class B-1
Principal Distribution Amount will be distributed to the Class B-1
Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;
(F) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates pursuant to clause (A) above, the amount
distributed to the Class M-1 Certificates pursuant to clause (B)
above, the amount distributed to the Class M-2 Certificates pursuant
to clause (C) above, the amount distributed to the Class M-3
Certificates pursuant to clause (D) above and the amount distributed
to the Class B-1 Certificates pursuant to clause (E) above and (y)
the Class B-2 Principal Distribution Amount will be distributed to
the Class B-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(G) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates pursuant to clause (A) above, the amount
distributed to the Class M-1 Certificates pursuant to clause (B)
above, the amount distributed to the Class M-2 Certificates pursuant
to clause (C) above, the amount distributed to the Class M-3
Certificates pursuant to clause (D) above, the amount distributed to
the Class B-1 Certificates pursuant to clause (E) above and the
amount distributed to the Class B-2 Certificates pursuant to clause
(F) above and (y) the Class B-3 Principal Distribution Amount will
be distributed to the Class B-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(H) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to
the Class A Certificates pursuant to clause (A) above, the amount
distributed to the Class M-1 Certificates pursuant to clause (B)
above, the amount distributed to the Class M-2 Certificates pursuant
to clause (C) above, the amount distributed to the Class M-3
Certificates pursuant to clause (D) above, the amount distributed to
the Class B-1 Certificates pursuant to clause (E) above, the amount
distributed to the Class B-2 Certificates pursuant to clause (F)
above and the amount distributed to the Class B-3 Certificates
pursuant to clause (G) above and (y) the Class B-4 Principal
Distribution Amount will be distributed to the Class B-4
Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and
(I) any amount of the Principal Distribution Amount remaining
after making all of the distributions in clauses (A), (B), (C), (D),
(E), (F), (G) and (H) above shall be applied as set forth in Section
4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date, pro rata, among the Class AV-1, Class
AV-2 and Class AV-3 Certificates;
(ii) to pay the remaining Interest Carry Forward Amounts for
the Classes of Class A Certificates, if any, pro rata, among the
Class AV-1, Class AV-2 and Class AV-3 Certificates;
(iii) to pay the Extra Principal Distribution Amount for such
Distribution Date in accordance with Section 4.02(a);
(iv) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-1 Certificates;
(v) to pay the remaining Class M-1 Interest Carry Forward
Amount, if any;
(vi) to pay the Class M-1 Realized Loss Amortization Amount
for such Distribution Date;
(vii) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-2 Certificates;
(viii) to pay the remaining Class M-2 Interest Carry Forward
Amount, if any;
(ix) to pay the Class M-2 Realized Loss Amortization Amount
for such Distribution Date;
(x) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-3 Certificates;
(xi) to pay the remaining Class M-3 Interest Carry Forward
Amount, if any;
(xii) to pay the Class M-3 Realized Loss Amortization Amount
for such Distribution Date;
(xiii) to pay any remaining unpaid Accrued Certificate
Interest for such Distribution Date for the Class B-1 Certificates;
(xiv) to pay the remaining Class B-1 Interest Carry Forward
Amount, if any;
(xv) to pay the Class B-1 Realized Loss Amortization Amount
for such Distribution Date;
(xvi) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class B-2 Certificates;
(xvii) to pay the remaining Class B-2 Interest Carry Forward
Amount, if any;
(xviii) to pay the Class B-2 Realized Loss Amortization Amount
for such Distribution Date;
(xix) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class B-3 Certificates;
(xx) to pay the remaining Class B-3 Interest Carry Forward
Amount, if any;
(xxi) to pay the Class B-3 Realized Loss Amortization Amount
for such Distribution Date;
(xxii) to pay any remaining unpaid Accrued Certificate
Interest for such Distribution Date for the Class B-4 Certificates;
(xxiii) to pay the remaining Class B-4 Interest Carry Forward
Amount, if any;
(xxiv) to pay the Class B-4 Realized Loss Amortization Amount
for such Distribution Date;
(xxv) concurrently, to the Class AV-1, Class AV-2 and Class
AV-3 Certificates, pro rata, the aggregate amount of any LIBOR
Carryover Amount due to such Certificates;
(xxvi) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that
order, any LIBOR Carryover Amount due to such Certificates;
(xxvii) to pay the Class N Certificates, (A) the Accrued
Certificate Interest for the Class N Certificates, (B) the unpaid
Interest Carry Forward Amount for the Class N Certificates and (C)
any remaining Monthly Excess Cashflow Amount to reduce the Class N
Notional Amount, until the Class N Notional Amount has been reduced
to zero; and
(xxviii) to the Class X Certificates, the Class X
Distributable Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the Holders
of the Class R Certificates in respect of the Class R-1 Interest, any remaining
amount in the Distribution Account on such date after the application pursuant
to Sections 4.01, 4.02(a), 4.02(b)(i)-(xxviii) and 4.02(c).
(c) On each Distribution Date, all prepayment penalties (including
amounts deposited in connection with the full or partial waiver of such
prepayment penalties 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.
(d) Any amounts distributed to the Certificates in respect of LIBOR
Carryover Amounts pursuant to Sections 4.01(b)(xxv) and (xxvi) shall first be
deemed distributed by REMIC 2 as a distribution in respect of the REMIC 2 Class
X/N Interest, to REMIC A and distributed thereby as a distribution to the REMIC
A Class X/N Interest, and then distributed to the Certificates from the Grantor
Trust as payments on notional principal contracts in the nature of cap
contracts. Any remaining Yield Maintenance Agreement Payment shall be treated as
having been distributed to the Holders of the Class X/N Interest from the
Grantor Trust.
(e) On each Distribution Date, Unpaid Realized Loss Amounts on the
Offered Certificates will be reduced by the amount of any Subsequent Recoveries
received during the related Prepayment Period in the same order as Realized Loss
Amortization Amounts are paid to the Offered Certificates pursuant to Section
4.02(b) above.
Section 4.03 Allocation of Losses.
Realized Losses shall be allocated against the Overcollateralization
Amount until the Overcollateralization Amount has been reduced to zero. 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 exceeds the Pool Balance as of the end of the related Collection
Period, such excess will be allocated against the 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.
Special Hazard Losses will be allocated as described above, provided
that if the cumulative amount of such losses, as of any date of determination,
exceeds the greatest of (i) 1.0% of the Pool Balance 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 aggregate
principal balances of the Mortgage Loans in the largest zip-code concentration
in the State of California as of the date of determination, such losses will be
allocated among the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class
B-3 and Class B-4 Certificates, pro rata, based on their respective Certificate
Principal Balances.
Section 4.04 Method of Distribution.
The Trustee shall make distributions in respect of a Distribution
Date to each Certificateholder of record on the related Record Date (other than
as provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates the aggregate initial Certificate
Principal Balance or Notional Amount of which is in excess of $5,000,000, or by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register, provided that
the Trustee may deduct a reasonable wire transfer fee from any payment made by
wire transfer. Distributions among Certificateholders shall be made in
proportion to the Percentage Interests evidenced by the Certificates held by
such Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor, the Servicer or the Seller
shall have any responsibility therefor except as otherwise provided by
applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based, as applicable, on the Mortgage
Loan information contained in the Remittance Report, the Trustee shall prepare
and post on its website at xxx.xxxxxxxx.xxx/xxx, a statement as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
principal or reduction of Notional Amount, separately identified;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
interest or Class X Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the
Overcollateralization Release Amount, the Overcollateralization
Deficiency and the Targeted Overcollateralization Amount as of such
Distribution Date and the Monthly Excess Interest Amount and Monthly
Excess Cashflow Amount for such Distribution Date;
(iv) the aggregate amount of servicing compensation received
by the Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related
Collection Period;
(vi) the Pool Balance at the close of business at the end of
the related Collection Period;
(vii) the number, weighted average remaining term to maturity
and weighted average Mortgage Interest Rate of the Mortgage Loans as
of the related Due Date;
(viii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) 30 to 59 days past due on a contractual basis,
(b) 60 to 89 days past due on a contractual basis, (c) 90 or more
days past due on a contractual basis, (d) as to which foreclosure
proceedings have been commenced and (e) in bankruptcy as of the
close of business on the last day of the calendar month preceding
such Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of
such Mortgage Loan, the unpaid principal balance and the Principal
Balance of such Mortgage Loan as of the date it became an REO
Property;
(x) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding
the Distribution Date, and, cumulatively, the total number and
cumulative principal balance of all REO Properties as of the close
of business of the last day of the preceding Collection Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xii) the aggregate amount of prepayment penalties collected
(including amounts deposited in connection with the full or partial
waiver of such prepayment penalties pursuant to Section 3.01) during
the related Collection Period and the amounts thereof allocable to
the Class N Certificates and the Class X Certificates;
(xiii) the aggregate amount of Realized Losses incurred during
the related Collection Period and the cumulative amount of Realized
Losses;
(xiv) the Certificate Principal Balance, or Notional Amount,
as applicable, of each Class of Certificates, after giving effect to
the distributions, and allocations of Realized Losses or Applied
Realized Loss Amounts, as applicable, made on such Distribution
Date, separately identifying any reduction thereof due to
allocations of Realized Losses or Applied Realized Loss Amounts;
(xv) the Accrued Certificate Interest in respect of each Class
of Offered Certificates for such Distribution Date, separately
identifying the portions thereof attributable to LIBOR Carryover
Amounts, 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 3.23;
(xvii) [Reserved];
(xviii) [Reserved];
(xix) the amount of the Trustee Fee paid;
(xx) the LIBOR Carryover Amounts distributed on such
Distribution Date and the portion thereof constituting LIBOR
Carryover Amounts, the amount of all LIBOR Carryover Amounts covered
by withdrawals from the Reserve Account and the amounts remaining
after giving effect to distributions thereof on such Distribution
Date;
(xxi) any Overcollateralization Deficiency after giving effect
to the distribution of principal on such Distribution Date;
(xxii) whether a Trigger Event has occurred and is continuing,
and the cumulative Realized Losses, as a percentage of the original
Pool Balance;
(xxiii) the Available Funds;
(xxiv) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxv) the Liquidation Report for such Distribution Date;
(xxvi) the aggregate Principal Balance of Mortgage Loans
purchased by the Servicer or Seller during the related Collection
Period and indicating the Section of this Agreement requiring or
allowing the purchase of each such Mortgage Loan;
(xxvii) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Servicer (or an affiliate) during the related
Collection Period in connection with Section 3.16.
(xxviii) the amount of Subsequent Recoveries received during
the related Prepayment Period.
Parties that are unable to use xxxx://xxx.xxxxxxxx.xxx/xxx are
entitled to have a paper copy mailed to them via first class mail by calling the
Trustee at (000) 000-0000 and indicating such. The Trustee shall have the right
to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes.
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.
(c) On each Distribution Date, the Trustee shall make available to
the Residual Certificateholders a copy of the reports made available 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), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), 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 the interest portion of 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 and shall not make any Advances with respect to
the principal portion of the Monthly Payments that would have been due on the
related Due Date with respect to REO Properties or Second Lien Mortgage Loans.
On or before the close of business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of the Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.07, used by the Servicer in discharge of
any such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Servicer with respect
to the Mortgage Loans and REO Properties. 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 the Trust acquires title to the
related Mortgaged Property or 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 REMIC Distributions.
(a) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 1
to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-1 Interest), as the case may be:
(i) to Holders of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1 Regular Interest
LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest LT1M2,
REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1, REMIC 1
Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3, REMIC 1 Regular
Interest LT1B4 and REMIC 1 Regular Interest LT1ZZ, pro rata, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued
Interest in respect of REMIC 1 Regular Interest LT1ZZ shall be reduced and
deferred when the REMIC 1 Overcollateralized Amount is less than the REMIC
1 Overcollateralization Target Amount, by the lesser of (x) the amount of
such difference and (y) the Maximum LT1ZZ Uncertificated Accrued Interest
Deferral Amount and such amount will be payable to the Holders of REMIC 1
Regular Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1 Regular
Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular Interest
LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular Interest LT1B1,
REMIC 1 Regular Interest LT1B2, REMIC 1 Regular Interest LT1B3 and REMIC 1
Regular Interest LT1B4 in the same proportion as the Extra Principal
Distribution Amount is allocated to the Corresponding Classes;
(ii) to Holders of REMIC 1 Regular Interest LT1XX, in an amount
equal to (A) the Uncertificated Accrued Interest for such Distribution
Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates;
(iii) to the Holders of REMIC 1 Regular Interests, in an amount
equal to the remainder of the REMIC 1 Marker Allocation Percentage of
Available Funds for such Distribution Date after the distributions made
pursuant to clause (i) above, allocated as follows:
(A) to REMIC 1 Regular Interest LT1AA, 98.00% of such
remainder, until the Uncertificated Principal Balance of such
Uncertificated REMIC 1 Regular Interest is reduced to zero;
(B) to REMIC 1 Regular Interest LT1AV1, REMIC 1 Regular
Interest LT1AV2, REMIC 1 Regular Interest LT1AV3, REMIC 1 Regular
Interest LT1M1, REMIC 1 Regular Interest LT1M2, REMIC 1 Regular
Interest LT1M3, REMIC 1 Regular Interest LT1B1, REMIC 1 Regular
Interest LT1B2, REMIC 1 Regular Interest LT1B3 and REMIC 1 Regular
Interest LT1B4, 1.00% of such remainder, in the same proportion as
principal payments are allocated to the Corresponding Classes, until
the Uncertificated Principal Balances of such REMIC 1 Regular
Interests are reduced to zero; then
(C) to REMIC 1 Regular Interest LT1ZZ, 1.00% of such
remainder, until the Uncertificated Principal Balance of such REMIC
1 Regular Interest is reduced to zero; provided, however, that (i)
98.00% and (ii) 2.00% of any principal payments that are
attributable to an Aggregate Overcollateralization Release Amount
shall be allocated to (i) REMIC 1 Regular Interest LT1AA and (ii)
REMIC 1 Regular Interest LT1ZZ, respectively; and
(D) to the Holders of REMIC 1 Regular Interest LT1XX, in an
amount equal to the REMIC 1 Sub WAC Allocation Percentage of
Available Funds for such Distribution Date after the distributions
made pursuant to clause (i) above.
(b) (i) The Trustee shall cause the following allocation of losses:
(A) The REMIC 1 Marker Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Marker
Allocation Percentage of the aggregate amount of any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for
any Distribution Date shall be allocated first, to Uncertificated
Accrued Interest payable to REMIC 1 Regular Interest LT1AA and REMIC
1 Regular Interest LT1ZZ up to an aggregate amount equal to the
REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter among REMIC 1 Regular Interest LT1AA, REMIC 1 Regular
Interest LT1AV1, REMIC 1 Regular Interest LT1AV2, REMIC 1 Regular
Interest LT1AV3, REMIC 1 Regular Interest LT1M1, REMIC 1 Regular
Interest LT1M2, REMIC 1 Regular Interest LT1M3, REMIC 1 Regular
Interest LT1B1, REMIC 1 Regular Interest LT1B2, REMIC 1 Regular
Interest LT1B3, REMIC 1 Regular Interest LT1B4 and REMIC 1 Regular
Interest LT1ZZ pro rata based on, and to the extent of, one month's
interest at the then applicable respective Uncertificated REMIC 1
Pass-Through Rate on the respective Uncertificated Principal Balance
of each such REMIC 1 Regular Interest; and
(B) The REMIC 1 Sub WAC Allocation Percentage of the aggregate
amount of any Prepayment Interest Shortfalls and the REMIC 1 Sub WAC
Allocation Percentage of the aggregate amount of any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for
any Distribution Date shall be allocated to REMIC 1 Regular Interest
LT1XX. For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any
Distribution Date, the aggregate amount of any Prepayment Interest
Shortfalls and any Relief Act Interest Shortfalls shall be allocated
pro rata among all classes of REMIC 1 Regular Interests.
(C) The REMIC 1 Marker Percentage of all Realized Losses on
the Mortgage Loans shall be allocated by the Trustee on each
Distribution Date to the following REMIC 1 Regular Interests in the
specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to REMIC 1 Regular Interest LT1AA and REMIC 1
Regular Interest LT1ZZ up to an aggregate amount equal to the REMIC
1 Interest Loss Allocation Amount, 98% and 2%, respectively; second,
to the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1AA and REMIC 1 Regular Interest LT1ZZ up to an aggregate amount
equal to the REMIC 1 Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of
REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest LT1B4 and
REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest
LT1B4 has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1AA, REMIC 1
Regular Interest LT1B3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1%
and 1%, respectively, until the Uncertificated Principal Balance of
REMIC 1 Regular Interest LT1B3 has been reduced to zero; fifth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT1AA, REMIC 1 Regular Interest LT1B2 and REMIC 1 Regular Interest
LT1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1B2 has been reduced
to zero; sixth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1B1 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1B1
has been reduced to zero; seventh to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT1AA, REMIC 1 Regular Interest
LT1M3 and REMIC 1 Regular Interest LT1ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1M3 has been reduced to zero; eighth, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1AA,
REMIC 1 Regular Interest LT1M2 and REMIC 1 Regular Interest LT1ZZ,
98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1M2 has been reduced to zero;
and ninth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT1AA, REMIC 1 Regular Interest LT1M1 and REMIC 1
Regular Interest LT1ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1M1
has been reduced to zero.
(D) The REMIC 1 Sub WAC Allocation Percentage of all Realized
Losses shall be applied after all distributions have been made on
each Distribution Date and shall be allocated to REMIC 1 Regular
Interest LT1XX.
(ii) Any increase in principal balance due to a Subsequent Recovery
allocated to the Class B-3 Certificates will increase the balance of the
REMIC 2 Class B-3 Interest by the same amount. Any increase in principal
balance due to a Subsequent Recovery allocated to the Class B-4
Certificates will increase the balance of the REMIC 2 Class B-4 Interest
by the same amount.
(iii) With respect to REMIC 1, any increase in principal balance due
to a Subsequent Recovery that increases the Certificate Principal Balance
of one or more Classes of Certificates shall be allocated as follows: 50%
to REMIC 1 Regular Interest LT1XX; 49% to REMIC 1 Regular Interest LT1AA;
0.5% to REMIC 1 Regular Interest LT1ZZ; and 0.5% to each REMIC 1 Regular
Interest that is a Corresponding Class to any REMIC 2 Regular Interest
that was increased as a result of such Subsequent Recovery (provided, that
if more than one REMIC 2 Regular Interest is so increased, such amount
shall be allocated to the REMIC 1 Regular Interests that are Corresponding
Classes in the same proportion as the increase is allocated to the
applicable REMIC 2 Regular Interests). To the extent any Subsequent
Recovery does not increase the balance of any Class of Certificates, such
Subsequent Recovery shall be allocated among the REMIC 1 Regular Interests
as follows: 50% to REMIC 1 Regular Interest LT1XX; 49% to REMIC 1 Regular
Interest LT1AA; and 1% to REMIC 1 Regular Interest LT1ZZ.
(c) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.08 (other than on the Certificates) are
deemed distributions, and distributions of funds from the Distribution Account
shall be made only in accordance with Sections 4.01 and 4.02 hereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Each of the Class AV-1, Class AV-2, Class AV-3, Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2, Class B-3, Class B-4, Class N, Class X,
Class R and Class R-A 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 shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of $25,000
and integral multiples of $1 in excess thereof. The Class N, Class X and Class R
Certificates are issuable only in minimum Percentage Interests of 10%. The Class
R-A Certificates are issuable only in minimum Percentage Interests of 50%.
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
shall be Book-Entry Certificates. The Class N, Class X and Class R Certificates
shall not be Book-Entry Certificates but shall be issued in fully registered
certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the 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 Certificate Custodian, on behalf of the Depository,
if directed to do so pursuant to instructions from the Depository. Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and their agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If the Depository 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 the Trustee or the Depositor is unable to
locate a qualified successor, the Trustee shall notify all Certificate Owners of
Book-Entry Certificates, through the Depository, of the occurrence of such event
and of the availability of definitive, fully registered certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. 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 Seller's expense, execute on behalf of
the Trust and the Certificate Registrar shall authenticate the Definitive
Certificates. Neither the Depositor nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee, the Certificate Registrar, the Servicer, any Paying
Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) No transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, other than the initial
transfer of the Private Certificates by the Depositor, (i) unless such transfer
is made in reliance upon Rule 144A (as evidenced by the investment letter
delivered to the Certificate Registrar, in substantially the form attached
hereto as Exhibit J) under the 1933 Act, the Certificate Registrar and the
Depositor may 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, the Trustee or the
Depositor or (ii) the Certificate Registrar shall require the transferor to
execute a transferor certificate (in substantially the form attached hereto as
Exhibit L) and the transferee to execute an investment letter (in substantially
the form attached hereto as Exhibit J) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Certificate Registrar
certifying to the Depositor and the Certificate Registrar the facts surrounding
such transfer, which investment letter shall not be an expense of the
Certificate Registrar or the Depositor. The Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Certificate Registrar and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor, (such requirement
is satisfied only by the Certificate Registrar's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer or (ii)
(except in the case of a Class R, Class R-A, Class X or Class N Certificate) if
the purchaser is an insurance company, a representation that the purchaser is an
insurance company which is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) (except in the case of a Class R, Class R-A, Class X or
Class N Certificate) in the case of any such ERISA Restricted Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a trustee of any such
plan or any other person acting on behalf of any such plan or arrangement or
using such plan's or arrangement's assets, an Opinion of Counsel satisfactory to
the Certificate Registrar, to the effect that the purchase or holding of such
ERISA Restricted Certificate will not result in the assets of the Trust being
deemed to be "plan assets" and subject to the prohibited transaction provisions
of ERISA and the Code and will not subject the Certificate Registrar or the
Trustee to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. The representations in clause (i) or (ii) of the
preceding sentence shall be deemed to have been made to the Certificate
Registrar by the acceptance by a Certificate Owner of the beneficial interest in
any such Class of ERISA-Restricted Certificates, unless the Certificate
Registrar shall have received from the transferee an alternative representation
acceptable in form and substance to the 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
subject to ERISA or to the Code without the delivery to the Certificate
Registrar of an Opinion of Counsel satisfactory to the Certificate Registrar as
described above shall be void and of no effect.
Each Person who has or who acquires any Ownership Interest in 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 Residual Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in form
and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Residual Certificates.
(iv) Any attempted or purported transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become a Holder of a Residual Certificate,
then the prior Holder of such Residual Certificate that is a Permitted
Transferee shall, upon discovery that the registration of transfer of such
Residual Certificate was not in fact permitted by this Section, be
restored to all rights as Holder thereof retroactive to the date of
registration of transfer of such Residual Certificate. The Certificate
Registrar shall be under no liability to any Person for any registration
of transfer of a Residual Certificate that is in fact not permitted by
this Section or for making any distributions due on such Residual
Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the
Certificate Registrar received the documents specified in clause (iii).
The Trustee shall be entitled to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at the time such
distributions were made all distributions made on such Residual
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such
Residual Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of such
Residual Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of such Residual
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Residual
Certificate that is a Permitted Transferee, except that in the event that
the Trustee determines that the Holder of such Residual Certificate may be
liable for any amount due under this Section or any other provisions of
this Agreement, the Trustee may withhold a corresponding amount from such
remittance as security for such claim. The terms and conditions of any
sale under this clause (v) shall be determined in the sole discretion of
the Trustee and it shall not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee will provide to the
Internal Revenue Service, and to the persons specified in Sections
860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e)(5) of the Code on transfers of residual
interests to disqualified organizations. The Trustee shall be entitled to
reasonable compensation for providing such information from the person to
whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC hereunder to
fail to qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
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 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, any Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and 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 5.05 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 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 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(f) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.
(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), 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(f) 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 from
withdrawals from the Collection Account pursuant to Section 3.05 of this
Agreement and shall not otherwise be entitled to make withdrawals of, or
receive, Advance Reimbursement Amounts that shall be deposited in the
Distribution Account pursuant to Section 3.04(b) hereof, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section 3.05
hereof. An Advance Facility may be terminated by the joint written direction of
the Servicer and the related Advance Financing Person. Written notice of such
termination shall be delivered to the Trustee in the manner set forth in Section
11.05 hereof. Neither of the Depositor nor the Trustee shall, as a result of the
existence of any Advance Facility, have any additional duty or liability with
respect to the calculation or payment of any Advance Reimbursement Amount, nor,
as a result of the existence of any Advance Facility, shall the Depositor or the
Trustee have any additional responsibility to track or monitor the
administration of the Advance Facility or the payment of Advance Reimbursement
Amounts to the Servicer's Assignee. The Servicer shall indemnify the Depositor,
the Trustee, any successor Servicer and the Trust Fund for any claim, loss,
liability or damage resulting from any claim by the related Advance Financing
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 Depositor, the Trustee or any successor Servicer, as the case may be, or
failure by the successor Servicer or the Trustee, as the case may be, 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, as the case may be, 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. The Servicer shall maintain and provide to any
successor Servicer and, upon request, the Trustee, a detailed accounting on a
loan-by-loan basis as to amounts advanced by, 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) Reserved.
(f) 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.
(g) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.07(d), any Nonrecoverable Advance referred
to therein may have been made by 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.
(h) Any amendment to this Section 6.05 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 6.05, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor, the Seller and the Servicer without the
consent of any Certificateholder, provided such amendment complies with Section
11.01 hereof. All reasonable costs and expenses (including attorneys' fees) of
each party hereto of any such amendment shall be borne solely by the Servicer.
The parties hereto hereby acknowledge and agree that: (a) the Advances and/or
Servicing Advances financed by and/or pledged to an Advance Financing Person
under any Advance Facility are obligations owed to the Servicer payable only
from the cash flows and proceeds received under this Agreement for reimbursement
of Advances and/or Servicing Advances only to the extent provided herein, and
the Trustee and the Trust are not, as a result of the existence of any Advance
Facility, obligated or liable to repay any Advances and/or Servicing Advances
financed by the Advance Financing Person; (b) the Servicer will be responsible
for remitting to the Advance Financing Person the applicable amounts collected
by it as reimbursement for Advances and/or Servicing Advances funded by the
Advance Financing Person, subject to the provisions of this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and any Advance
Financing Person.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events (each, a "Servicer Event of
Termination") shall occur and be continuing:
(i) (A) The failure by the Servicer to make any required 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
(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 Pool Balance as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution
Date:
Distribution Date Occurring In Percentage
------------------------------ ----------
August 2007 through July 2008 5.500%
August 2008 through July 2009 7.250%
August 2009 through July 2010 8.000%
August 2010 through July 2011 8.500%
August 2011 and thereafter 9.250%
(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 Trustee
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor Servicer) for the administration by it
of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the servicing to the successor Servicer and amending this Agreement
to reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer (or if the predecessor Servicer is the Trustee, the
initial Servicer) upon presentation of reasonable documentation of such costs
and expenses.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor Servicer as is
approved in accordance with this Agreement) shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof arising on and after its succession.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the Trustee and such successor shall
agree, not to exceed the Servicing Fee). The successor servicer shall be
entitled to withdraw from the Collection Account all costs and expenses
associated with the transfer of the servicing to the successor servicer. The
appointment of a successor servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer to pay any deductible under an insurance policy pursuant
to Section 3.12 or to indemnify the parties indicated in Section 3.26 pursuant
to the terms thereof, nor shall any successor Servicer be liable for any acts or
omissions of the predecessor Servicer or for any breach by such Servicer of any
of its representations or warranties contained herein or in any related document
or agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
In the event of a Servicer Event of Termination, notwithstanding
anything to the contrary above, the Trustee and the Depositor hereby agree that
upon delivery to the Trustee by the Servicing Rights Pledgee of a letter signed
by the Servicer within ten Business Days of when notification of such event
shall have been provided to the Trustee, whereunder the Servicer shall resign as
Servicer under this Agreement, the Servicing Rights Pledgee or its designee
shall be appointed as successor Servicer (provided that at the time of such
appointment the Servicing Rights Pledgee or such designee meets the requirements
of a successor Servicer set forth above) and the Servicing Rights Pledgee agrees
to be subject to the terms of this Agreement.
(b) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Holders of Certificates entitled to at least 66 2/3% of the
Voting Rights allocated to the Class of Certificates affected by a Servicer
Event of Termination may, on behalf of all Certificateholders, waive any events
permitting removal of the Servicer as servicer pursuant to this Article VII,
provided, however, that such Holders 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 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 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 personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee unless
it shall be proved that the Trustee was negligent in ascertaining or
investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Majority Certificateholders relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising or omitting to exercise any trust
or power conferred upon the Trustee under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any failure
by the Servicer to comply with the obligations of the Servicer referred to
in clauses (i) and (ii) of Section 7.01(a) or any Servicer Event of
Termination unless a Responsible Officer of the Trustee at the applicable
Corporate Trust Office obtains actual knowledge of such failure or the
Trustee receives written notice of such failure from the Servicer or the
Majority Certificateholders. In the absence of such receipt of such
notice, the Trustee may conclusively assume that there is no Servicer
Event of Termination.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except 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.
The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall promptly remit to the Servicer upon receipt any such
complaint, claim, demand, notice or other document (i) which is delivered to the
Trustee at its Corporate Trust Office; (ii) of which a Responsible Officer has
actual knowledge and (iii) which contains information sufficient to permit the
Trustee to make a determination that the real property to which such document
relates to is a Mortgaged Property.
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;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination and
after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or documents, unless requested in writing to do so by
the Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding. The reasonable expense of
every such examination shall be paid by the Servicer or, if paid by the
Trustee shall be reimbursed by the Servicer upon demand. 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 does not assumes any responsibility
for the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or Related Document. The Trustee shall not be accountable for the
use or application by the Servicer, or for the use or application of any funds
paid to the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Servicer. The Trustee shall not at
any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the existence, condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard insurance thereon (other than if the Trustee shall assume the duties of
the Servicer pursuant to Section 7.02); the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment; the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02); the compliance by the Depositor, the Seller or the Servicer with any
warranty or representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation prior to the Trustee's
receipt of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Servicer (other than if the
Trustee shall assume the duties of the Servicer pursuant to Section 7.02), or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 7.02), taken in the name
of the Trustee; the failure of the Servicer to act or perform any duties
required of it as agent of the Trustee hereunder; or any action by the Trustee
taken at the instruction of the Servicer (other than if the Trustee shall assume
the duties of the Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall not have any responsibility for
filing any financing or continuation statement in any public office at any time
or to otherwise perfect or maintain the perfection of any security interest or
lien granted to it hereunder.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Seller, the Servicer, the Depositor or their Affiliates.
Section 8.05 Seller to Pay Trustee Fees and Expenses.
The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee pursuant to Section 4.01(i)
and, to the extent 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, 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 officers, directors, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, damages, claims or expenses
incurred in connection with (a) 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 its duties hereunder or by reason of such party's reckless
disregard of obligations and duties hereunder and (b) the second paragraph of
Section 2.01. 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 notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor 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; 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 either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating Agency.
Section 8.09 Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
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
(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
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 AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
(a) The Trustee shall make or cause to be made REMIC elections for
each of REMIC 1, REMIC 2, REMIC A, REMIC B and REMIC C, as set forth in the
Preliminary Statement on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The 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 or cause to be prepared, sign and file
or cause to be filed, each REMIC's federal and state tax and information returns
as such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Trustee.
(e) The Holder of the Residual Certificates with respect to the
Residual Interest in the related 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 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 take such action 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 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 related 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 respect of the related 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 2005,
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 (i) the rights of the Offered
Certificates to receive LIBOR Carryover Amounts as a right in interest rate cap
contracts written by the Class X and Class N Certificateholders, as beneficial
owners of the REMIC A Class X/N Interest, in favor of the Holders of the Offered
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 and (ii) the rights of the Holders of the Class X/N Interest under the
Yield Maintenance Agreement in accordance with the terms thereof and shall
assign such rights for federal tax return and information reporting a value of
zero. 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 the
Offered Certificates receive interest in excess of their Pass-Through Rate, such
interest will be treated as distributed to the Holders of the Class X/N
Interest, together with any amount deposited in the Reserve Account in respect
of the Yield Maintenance Agreement, and then paid to the respective Classes of
Class X-0, Xxxxx X-0, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4
Certificates pursuant to the related interest rate cap agreement. To the extent
any LIBOR Carryover Amount is paid from funds other than the Yield Maintenance
Agreement, such payment shall be treated as distributed to REMIC A in respect of
the REMIC A Class X/N Interest and then paid to the applicable Class of
Certificates pursuant to the related interest rate cap agreement.
(m) [Reserved]
(n) In the event that the beneficial ownership of the Class N
Certificates and the Class X Certificates is held by a single Person for federal
income tax purposes, such Person shall be treated as the beneficial owner of the
REMIC A Class X/N Interest. In the event that beneficial ownership of the Class
N and the Class X Certificates is held by two or more Persons for tax purposes,
the Trustee shall treat the Class N Certificateholders and the Class X
Certificateholders as partners in a partnership that owns the REMIC A Class X/N
Interest for federal income tax purposes and shall not treat the Class N and
Class X Certificates as an interest in any REMIC created hereunder. By acquiring
the Class N Certificates and the Class X Certificates, the respective Holders
will agree to treat the Class N Certificates and the Class X Certificates in the
manner described in the preceding sentence for federal income tax purposes in
the event that the beneficial ownership of the Class N Certificates and the
Class X Certificates is separated. In such event, (i) a separate capital account
shall be established and maintained for each Holder of a Class N or Class X
Certificate in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv),
which shall be credited with income or gain and debited by any expenses or
losses and distributions allocable to such Certificates, (ii) the Class N
Certificates shall be allocated income in an amount equal to interest at the
Pass-Through Rate thereon and any original issue discount that would be
reportable thereon if the Class N Certificate were a debt instrument issued on
the date ownership of the Class N and Class X Certificates is separated, with a
principal balance equal to its Notional Amount, (iii) the Class X and Class N
Certificates shall be allocated income with respect to all prepayment penalties
(including amounts in connection with the full or partial waiver of such
prepayment penalties or premiums pursuant to Section 3.01) in accordance with
the allocation of such amounts pursuant to Section 4.02(c), to the extent not
allocated pursuant to Section 9.01(n)(ii) above, (iv) the Class X and Class N
Certificates shall be allocated accruals (under any reasonable method) of any
"cap premiums" deemed received on the date ownership of the Class X and Class N
Certificates is separated in respect of the obligation of the Class X/N Interest
to pay LIBOR Carryover Amounts, and shall be allocated expense in respect of any
actual payment of such LIBOR Carryover Amounts based on which one of such
Classes economically bears such expense, (v) the Class X Certificates shall be
allocated all remaining income and any expenses and Realized Losses with respect
to the Class X/N 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 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).
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 constituting part of the Trust
Fund, nor sell or dispose of any investments in the Distribution Account for
gain, nor accept any contributions to any REMIC constituting part of the Trust
Fund after the Closing Date, unless 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).
Section 9.04 REO Property.
(a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC constituting part
of the Trust Fund with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure" property within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC
constituting part of the Trust Fund of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Servicer has advised, or has caused the applicable Servicer to advise, the
Trustee in writing to the effect that, under the REMIC Provisions, such action
would not adversely affect the status of any REMIC constituting part of the
Trust Fund as a REMIC and any income generated for such REMIC by the REO
Property would not result in the imposition of a tax upon such REMIC.
(b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC constituting part of the
Trust Fund may hold REO Property for a longer period without adversely affecting
its REMIC status or causing the imposition of a Federal or state tax upon any
REMIC. If the Servicer has received such an extension, then the Servicer shall
continue to attempt to sell the REO Property for its fair market value as
determined in good faith by the Servicer for such longer period as such
extension permits (the "Extended Period"). If the Servicer has not received such
an extension and the Servicer is unable to sell the REO Property within 33
months after its acquisition by the Trust Fund or if the Servicer has received
such an extension, and the Servicer is unable to sell the REO Property within
the period ending three months before the close of the Extended Period, the
Servicer shall, before the end of the applicable period, (i) purchase such REO
Property at a price equal to the REO Property's fair market value as determined
in good faith by the Servicer or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to produce
a fair price prior to the expiration of the applicable period.
Section 9.05 Grantor Trust Administration.
The parties intend that the portions of the Trust Fund consisting of
the right of the Offered Certificates to receive LIBOR Carryover Amounts and the
obligation of the REMIC A Class X/N Interest to pay such LIBOR Carryover
Amounts, the Reserve Account and the right of the Trustee to receive Yield
Maintenance Agreement Payments subject to the obligation of the Holders of the
Class X/N Interest to pay LIBOR Carryover Amounts, shall be treated as a
"grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In addition, the assets of the Grantor Trust
shall include the prepayment charges in furtherance of such intention and the
right of the Class X/N Interest to receive such prepayment charges in
furtherance of such intention. The Trustee shall furnish or cause to be
furnished (i) to the Holders of the Certificates that have received LIBOR
Carryover Amounts, (ii) to the Holder of the Class X and Class N Certificates
(if there is a single beneficial owner thereof) or to itself on behalf of the
partnership comprised of the Holders of the Class X and Class N Certificates (if
there are two or more beneficial owners thereof) and (iii) to the Class N
Certificateholders in respect of prepayment charges received, and shall file or
cause to be filed with the Internal Revenue Service together with Form 1041 or
such other form as may be applicable, their allocable shares of income with
respect to the property held by the Grantor Trust, at the time or times and in
the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Seller,
the Servicer, the Depositor, the Trustee and the Certificate Registrar created
hereby (other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate upon
notice to the Trustee upon the earliest of (i) the Distribution Date on which
the Certificate Principal Balance of each Class of Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust Fund, and (iii) the optional purchase by the Servicer of the
Mortgage Loans as described below. Notwithstanding the foregoing, in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
The Servicer (or an Affiliate) 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 current Pool Balance is less than
10% of the 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"). Notwithstanding the foregoing, the Servicer
(or an Affiliate) may not exercise its optional purchase right unless any
Reimbursement Amount owed to the Trust pursuant to Section 2.03 hereof has been
paid.
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 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. Not less
than five (5) Business Days prior to such Determination Date relating to such
Distribution Date, the Trustee shall notify the Seller of the amount of any
unpaid Reimbursement Amount owed to the Trust.
(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 B-3, Class B-4,
Class N and Class X Certificates and the assets of REMIC A, REMIC B and REMIC C)
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 R-A Certificateholders shall
be entitled to all unclaimed funds and other assets with respect to REMIC A,
REMIC B and REMIC C. Holders of the Class N and Class X Certificates
(representing partners in a partnership which beneficially owns the REMIC A
Class X/N Interest), the Class B-3 Certificates and the Class B-4 Certificates
shall be entitled to look only to the Class R-A Certificateholder (in respect of
the Class R-A Interest, Class R-B Interest and Class R-C Interest, respectively)
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 REMIC 1, REMIC 2, REMIC A, REMIC B and REMIC C 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-1, Class AV-2 and Class AV-3 Certificates,
pro rata and (ii) to the Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2, Class B-3 and Class B-4 Certificates, the related Certificate
Principal Balance, as applicable, plus one month's interest thereon at the
applicable Pass-Through Rate, (B) to the Class N and Class X Certificates
in respect of the Class X/N Interest, the amount of any remaining Monthly
Excess Cash Flow Amounts not previously distributed thereon, (C) to the
remaining REMIC Regular Interests the amounts allocable thereto pursuant
to Section 4.08 and (D) to the Class R and Class R-A Certificateholders,
all cash on hand in respect of the related 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 REMIC B
and REMIC C will terminate on the last Distribution Date on which the Class B-3
Certificates or Class B-4 Certificates, as applicable, 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 or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement, which shall not be inconsistent with
the provisions of this Agreement; 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 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 2/3% 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 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.
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, 00000 Attention: General Counsel
(telecopy number (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the Depositor and the Trustee in writing by the
Seller, (b) in the case of the Trustee, JPMorgan Chase Bank, 0 Xxx Xxxx Xxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Attention: Institutional
Trust Services, C-BASS Series 2004-CB5, 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, Asset Backed Funding Corporation, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, X.X. 00000 Attention: Xxxxxxx X. Xxxxx-Xxxxxx, or
such other address as may be furnished to the Seller, the Servicer and the
Trustee in writing by the Depositor, and (d) in the case of the Servicer, Xxxxxx
Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, Attention:
Xxxxxx XxXxxxx, or such other address as may be furnished to the Seller, the
Depositor and the Trustee in writing by the Servicer. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Notice of any Servicer Event of Termination shall be given by telecopy
and by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 11.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
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; Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Surveillance Group; and Dominion Bond Rating Service, Inc.
00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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.
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.
ASSET BACKED FUNDING CORPORATION, as
Depositor
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxx-Xxxxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By:
-------------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
XXXXXX LOAN SERVICING LP, as Servicer
By:
-------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Trustee for the 2004-CB5 Trust,
C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB5
By:
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
STATE OF NORTH CAROLINA)
) ss.:
COUNTY OF MECKLENBURG )
On the 12th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxx X. Xxxxx-Xxxxxx, known to me to be a
Vice President of Asset Backed Funding Corporation, a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 12th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxxxxx Xxxxxxxx known to me to be a Vice
President of Credit-Based Asset Servicing and Securitization LLC, a limited
liability company that executed the within instrument, and also known to me to
be the person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 12th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxxxx X. Xxxxxxx, known to me to be a Vice
President of JPMorgan Chase Bank, a New York banking corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF TEXAS )
) ss.:
COUNTY OF )
On the 12th day of August, 2004 before me, a notary public in and
for said State, personally appeared Xxxxxx XxXxxxx, known to me to be a Senior
Vice President of Xxxxxx Loan Servicing LP, a Delaware limited partnership, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited partnership, and acknowledged to me that
such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
EXHIBIT A-1
[FORM OF THE 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS AV-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class AV-1 Original Class Certificate
Principal Balance of the Class
AV-1 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BHV71
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class AV-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class AV-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
AV-1 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class AV-1 Certificate becomes a Definitive Certificate,
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class AV-1 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class AV-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class AV-1 Certificate Margin. Interest will accrue on the Class
AV-1 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class AV-1 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AV-1 Certificates.
The Class AV-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT A-2
[FORM OF THE CLASS 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS AV-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class AV-2 Original Class Certificate
Principal Balance of the Class
AV-2 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
First Distribution Date: August Servicer: Xxxxxx Loan Servicing LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BHW54
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class AV-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class AV-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
AV-2 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class AV-2 Certificate becomes a Definitive Certificate,
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class AV-2 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class AV-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class AV-2 Certificate Margin. Interest will accrue on the Class
AV-2 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class AV-2 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AV-2 Certificates.
The Class AV-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT A-3
[FORM OF THE CLASS 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.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS AV-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class AV-3 Original Class Certificate
Principal Balance of the Class
AV-3 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BHX38
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class AV-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class AV-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
AV-3 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class AV-3 Certificate becomes a Definitive Certificate,
the Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class AV-3 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class AV-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class AV-3 Certificate Margin. Interest will accrue on the Class
AV-3 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class AV-3 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AV-3 Certificates.
The Class AV-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT B-1
[FORM OF CLASS B-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS B-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class B-1 Original Class Certificate
Principal Balance of the Class
B-1 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BJB99
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-1 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class B-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class B-1 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class B-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class B-1 Certificate Margin. Interest will accrue on the Class
B-1 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class B-1 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-1 Certificates.
The Class B-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A,
Class M-1, Class M-2 and Class M-3 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT B-2
[FORM OF CLASS B-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3 AND CLASS B-1 CERTIFICATES AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS B-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate
and adjustable-rate one- to four-family first and second lien mortgage
loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class B-2 Original Class Certificate
Principal Balance of the Class
B-2 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BJC72
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-2 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class B-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class B-2 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class B-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class B-2 Certificate Margin. Interest will accrue on the Class
B-2 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class B-2 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-2 Certificates.
The Class B-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A,
Class M-1, Class M-2, Class M-3 and Class B-1 Certificates as described in the
Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT B-3
[FORM OF CLASS B-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS B-1 AND CLASS B-2 CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS B-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class B-3 Original Class Certificate
Principal Balance of the Class
B-3 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BJD55
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-3 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class B-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class B-3 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class B-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class B-3 Certificate Margin. Interest will accrue on the Class
B-3 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class B-3 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-3 Certificates.
The Class B-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A,
Class M-1, Class M-2, Class M-3, Class B-1 and Class B-2 Certificates as
described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT B-4
[FORM OF CLASS B-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS B-4
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class B-4 Original Class Certificate
Principal Balance of the Class
B-4 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BJE39
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class B-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
B-4 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class B-4 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class B-4 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class B-4 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class B-4 Certificate Margin. Interest will accrue on the Class
B-4 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class B-4 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-4 Certificates.
The Class B-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates
as described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-1-1
[FORM OF CLASS R CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN TWO SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES, THE
CLASS N CERTIFICATES AND THE CLASS X CERTIFICATES OF THIS SERIES TO THE
EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1
OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN. ANY
PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING
BENEFICIAL OWNERSHIP OF THIS CLASS R CERTIFICATE.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS R
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class R Servicer: Xxxxxx Loan Servicing
LP
Date of Pooling and Servicing
Agreement and Cut-off Date: July Trustee: JPMorgan Xxxxx Xxxx
0, 0000
Xxxxxxx Date: August 12, 2004
First Distribution Date: August
25, 2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner
of a Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs or the Closing
Date, in the case of the first Distribution Date (the "Record Date"), from funds
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class R Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class R Certificates the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the Class R Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class R Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification (other than the initial transfer of this Certificate by the
Depositor), (i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law ("Plans") or any person who
is directly or indirectly purchasing the Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as five separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-1-2
[FORM OF CLASS R-A CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN THREE SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R-A CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES, THE
CLASS N CERTIFICATES AND THE CLASS R CERTIFICATES OF THIS SERIES TO THE
EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-A CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-A 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 AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-A CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO
THE CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN
A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM
THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT
OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE
SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN
THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
THIS CLASS R-A CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A
CLASS R-A CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS R-A CERTIFICATE.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS R-A
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class R-A Servicer: Xxxxxx Loan Servicing LP
Date of Pooling and Servicing
Agreement and Cut-off Date: July Trustee: JPMorgan Xxxxx Xxxx
0, 0000
Xxxxxxx Date: August 12, 2004
First Distribution Date: August
25, 2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________________ is the registered owner
of a Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R-A Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs or the Closing
Date, in the case of the first Distribution Date (the "Record Date"), from funds
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class R-A Certificates on such Distribution Date pursuant to
the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class R-A Certificates the
aggregate Percentage Interest of which is in excess of a 66% Percentage Interest
of the Class R-A Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class R-A Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification (other than the initial transfer of this Certificate by the
Depositor), (i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law ("Plans") or any person who
is directly or indirectly purchasing the Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as five separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-2
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS M-1
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class M-1 Original Class Certificate
Principal Balance of the
Class M-1 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BHY11
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-1 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class M-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class M-1 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-1 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class M-1 Certificate Margin. Interest will accrue on the Class
M-1 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class M-1 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A
Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-3
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS M-2
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class M-2 Original Class Certificate
Principal Balance of the
Class M-2 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BHZ85
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-2 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class M-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class M-2 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-2 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class M-2 Certificate Margin. Interest will accrue on the Class
M-2 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class M-2 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A
and Class M-1 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-4
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1 AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE AGREEMENT REFERRED TO HEREIN,
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING EITHER (A) THAT THE
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN OR (B) SUBJECT TO CERTAIN CONDITIONS SET
FORTH IN THE AGREEMENT, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT." EACH PERSON WHO
ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE DEEMED TO HAVE
MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION LETTER REFERRED TO
IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL HAVE PROVIDED SUCH
REPRESENTATION LETTER REFERRED TO IN THE PRECEDING SENTENCE TO THE
CERTIFICATE REGISTRAR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE
NULL AND VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS M-3
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class M-3 Original Class Certificate
Principal Balance of the
Class M-3 Certificates as of the
Pass-Through Rate: Variable Closing Date: $[ ]
Date of Pooling and Servicing Initial Certificate Principal
Agreement and Cut-off Date: July Balance: $[ ]
1, 2004
Servicer: Xxxxxx Loan Servicing
First Distribution Date: August LP
25, 2004
Trustee: JPMorgan Chase Bank
No.
Closing Date: August 12, 2004
CUSIP: 00000XXX0
ISIN: US04542BJA17
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that ___________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-3 Certificates on such Distribution Date pursuant to the Agreement provided,
however, that if any Class M-3 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class M-3 Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.
The Class M-3 Pass-Through Rate on each Distribution Date will be a
rate per annum equal to the sum of LIBOR as of the related LIBOR Determination
Date, plus the Class M-3 Certificate Margin. Interest will accrue on the Class
M-3 Certificates during each Interest Accrual Period at a rate equal to the
lesser of: (i) the Class M-3 Pass-Through Rate and (ii) the Pool Cap for such
Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-3 Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This Certificate is subordinated in right of payment to the Class A,
Class M-1 and Class M-2 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-5
[FORM OF CLASS X CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND IN CERTAIN OTHER PROPERTY.
THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES AND
CLASS N CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN
THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE 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 AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS X
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class X Servicer: Xxxxxx Loan Servicing
LP
Date of Pooling and Servicing
Agreement and Cut-off Date: July Trustee: JPMorgan Xxxxx Xxxx
0, 0000
Xxxxxxx Date: August 12, 2004
First Distribution Date: August
25, 2004
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class X Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Credit-Based Asset Servicing and Securitization LLC (the
"Seller"), the Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs or the Closing
Date, in the case of the first Distribution Date (the "Record Date"), from funds
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class X Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class X Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of a 66%
Percentage Interest of the Class X Certificates, or by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, provided that the Certificate
Registrar may deduct a reasonable wire transfer fee from any payment made by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class X Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification (other than the initial transfer of this Certificate by the
Depositor), (i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law ("Plans") or any person who
is directly or indirectly purchasing the Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT C-6
[FORM OF CLASS N CERTIFICATE]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND IN CERTAIN OTHER PROPERTY.
THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED
TO HEREIN.
THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE 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 AGREEMENT
REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY PERSON THAT
HAS NOT DELIVERED A REPRESENTATION LETTER STATING THAT THE TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"), OR A GOVERNMENTAL PLAN, AS DEFINED IN
SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT ACTING ON BEHALF OF OR
INVESTING THE ASSETS OF A PLAN.
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
SERIES 2004-CB5, CLASS N
evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional and FHA-insured fixed-rate and
adjustable-rate one- to four-family first and second lien mortgage loans formed
and sold by
ASSET BACKED FUNDING CORPORATION
Series 2004-CB5, Class N Original Class N Notional
Amount as of the Closing Date:
Pass-Through Rate: [____]
Initial Class N Notional Amount: $________
Date of Pooling and Servicing
Agreement and Cut-off Date: July
1, 2004 Servicer: Xxxxxx Loan Servicing LP
First Distribution Date: August
25, 2004 Trustee: JPMorgan Chase Bank
No. Closing Date: August 12, 2004
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE SERVICER, THE TRUSTEE OR ANY OF THEIR
AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________________________________ is the
registered owner of a Percentage Interest (obtained by dividing the Initial
Class N Notional Amount of this Certificate by the Original Class N Notional
Amount) in that certain beneficial ownership interest evidenced by all the Class
N Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Asset Backed
Funding Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), Credit-Based Asset Servicing and
Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs or the Closing
Date, in the case of the first Distribution Date (the "Record Date"), from funds
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class N Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date for such
Distribution Date and is the registered owner of Class N Certificates the
aggregate Initial Certificate Principal Balance of which is in excess of a 66%
Percentage Interest of the Class N Certificates, or by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, provided that the Certificate
Registrar may deduct a reasonable wire transfer fee from any payment made by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.
The Pass-Through Rate for this Class N Certificates on each
Distribution Date will be the per annum rate specified above.
This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class N Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified in the agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification (other than the initial transfer of this Certificate by the
Depositor), (i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law ("Plans") or any person who
is directly or indirectly purchasing the Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the 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 Fund, and (iii) the optional purchase by the Servicer of the Mortgage
Loans.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK, as Trustee
By:
-------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
JPMORGAN CHASE BANK, as
Certificate Registrar
By:
-------------------------------------
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform Gifts
JT TEN - as joint tenants with right to Minors Act
of survivorship and not as
tenants in common -------------------
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ____________________________________, as its agent.
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Institutional Trust Services, C-BASS Series 2004-CB5
Re: Pooling and Servicing Agreement dated as of July 1, 2004 among Asset
Backed Funding Corporation, as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, Xxxxxx Loan Servicing
LP, as servicer and JPMorgan Chase Bank.
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced above.
In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason:_____________________________________
By:_________________________________________
(authorized signer)
Issuer:_____________________________________
Address:____________________________________
____________________________________________
Date:_______________________________________
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
EXHIBIT F-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
Date
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2004 among Asset Backed Funding
Corporation, as depositor, Credit-Based Asset Servicing and
Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as
servicer, and JPMorgan Chase Bank, as trustee with respect to C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB5.
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.
JPMORGAN CHASE BANK
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of July 1, 2004 among Asset Backed Funding
Corporation, as depositor, Credit-Based Asset Servicing and
Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as
servicer, and JPMorgan Chase Bank, as trustee with respect to C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
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.
JPMORGAN CHASE BANK,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of July 1, 2004, among Asset Backed Funding Corporation, as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller, Xxxxxx Loan
Servicing LP, as servicer, and JPMorgan Chase Bank, as 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.
JPMORGAN CHASE BANK,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
================================================================================
ASSET BACKED FUNDING CORPORATION
as Purchaser
and
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed-Rate and Adjustable-Rate Mortgage Loans
2004-CB5 Trust,
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Dated as of July 1, 2004
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.......................................................
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans............................................
Section 2.02 Obligations of Seller Upon Sale...................................
Section 2.03 Payment of Purchase Price for the Mortgage Loans..................
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans....................................................
Section 3.02 Seller Representations and Warranties.............................
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller...........................................
ARTICLE V
[Reserved]
ARTICLE VI
TERMINATION
Section 6.01 Termination.......................................................
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment.........................................................
Section 7.02 Governing Law.....................................................
Section 7.03 Notices...........................................................
Section 7.04 Severability of Provisions........................................
Section 7.05 Counterparts......................................................
Section 7.06 Further Agreements................................................
Section 7.07 Intention of the Parties..........................................
Section 7.08 Successors and Assigns; Assignment of this Agreement..............
Section 7.09 Survival..........................................................
Schedule I - Mortgage Loan Schedule
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 1, 2004 (the
"Agreement"), between CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
("C-BASS" or the "Seller") and ASSET BACKED FUNDING CORPORATION (the
"Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller is the owner of either the notes or other
evidence of indebtedness (the "Mortgage Notes") or other evidence of ownership
so indicated on Schedule I hereto, and the other documents or instruments
constituting the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (a) to any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise, and (b) to the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of July 1, 2004 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, the Seller, Xxxxxx Loan Servicing LP ("Xxxxxx"), as
servicer, and JPMorgan Chase Bank, as trustee (the "Trustee"), the Purchaser
will convey the Mortgage Loans to 2004-CB5 Trust.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
"ALTA": The American Land Title Association or any successor
thereto.
"Custodian": A custodian acceptable to the Trustee, which may be the
Trustee and which shall not be the Seller or any affiliate of the Seller. The
initial Custodian shall be The Bank of New York.
"Insurance Agreement": With respect to any FHA Mortgage Loan, the
insurance contract issued by the FHA.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans. The Seller does hereby agree to
and does hereby sell, assign, set over, and otherwise convey to the Purchaser,
without recourse, on the Closing Date (i) all of its right, title and interest
in and to each Mortgage Loan and the related Cut-off Date Principal Balance
thereof, including any Related Documents, (ii) all payments on or collections in
respect of the Mortgage Loans due after the Cut-off Date; (iii) property which
secured such Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure; (iv) its interest in any insurance policies in respect of
the Mortgage Loans; and (v) all proceeds of any of the foregoing.
Section 2.02 Obligations of Seller Upon Sale. (a) In connection with
any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (x) to indicate in its books and
records that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (y) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all the Mortgage Loans specifying, among
other things, for each Mortgage Loan, as of the Cut-off Date, its account number
and Cut-off Date Principal Balance. Such file (the "Mortgage Loan Schedule")
which is included as Exhibit D to the Pooling and Servicing Agreement, shall
also be marked as Schedule I to this Agreement and is hereby incorporated into
and made a part of this Agreement.
In connection with such transfer and assignment of the Mortgage
Loans, the Seller shall, on behalf of the Purchaser, deliver to and deposit
with, the Custodian, as the agent of the Trustee, the following documents or
instruments (with respect to each Mortgage Loan, a "Mortgage File") with respect
to each Mortgage Loan so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B)
in the following form: "Pay to the order of JPMorgan Chase Bank, as Trustee
under the Pooling and Servicing Agreement, dated as of July 1, 2004, among
Credit-Based Asset Servicing and Securitization LLC, Asset Backed Funding
Corporation, Xxxxxx Loan Servicing LP and JPMorgan Chase Bank, C-BASS Mortgage
Loan Asset-Backed Certificates, Series 2004-CB5, without recourse," or with
respect to any lost Mortgage Note, an original lost note affidavit stating that
the original mortgage note was lost, misplaced or destroyed, together with a
copy of the related mortgage note;
(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 "JPMorgan Chase Bank, as Trustee under the Pooling and Servicing
Agreement, dated as of July 1, 2004, among Credit-Based Asset Servicing and
Securitization LLC, Asset Backed Funding Corporation, Xxxxxx Loan Servicing LP
and JPMorgan Chase Bank, C-BASS Mortgage Loan Asset-Backed Certificates, Series
2004-CB5, without recourse";
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy, other than for those Mortgage Loans listed on Exhibit V to the Pooling
and Servicing Agreement;
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vii) for each FHA Loan, the original mortgage insurance
certificate.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the 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
Custodian, promptly upon receipt thereof of either the original or a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original. If, pursuant to Section 2.02(v) above, the
original lender's title insurance policy was required to be delivered and was
not, the Seller shall deliver or cause to be delivered to the Custodian, a
written commitment or interim binder or preliminary report of title issued by
the title insurance or escrow company, with the original to be delivered to the
Custodian, promptly upon receipt thereof. The Seller shall deliver or cause to
be delivered to the Custodian promptly upon receipt thereof any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
Trustee (or within 90 days of the earlier of Seller's discovery or receipt of
notification if such defect would cause the Mortgage Loan not to be a "qualified
mortgage" for REMIC purposes). If the Seller does not cure such defect or
deliver such missing document within such time period, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with Section 2.03
of the Pooling and Servicing Agreement.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing Agreement.
(b) The Seller shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in 2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv) hereof to
be recorded; provided, however, the Seller need not cause to be recorded any
Assignment which relates to a Mortgage Loan in any jurisdiction under the laws
of which, as evidenced by an Opinion of Counsel delivered by the Seller to the
Trustee and the Rating Agencies, the recordation of such Assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan. Under
the terms of the Pooling and Servicing Agreement, the Seller shall be required
to deliver such assignments for recording within 30 days of the Closing Date.
The Seller shall furnish the Custodian with a copy of each Assignment of
Mortgage submitted for recording. In the event that any such Assignment is lost
or returned unrecorded because of a defect therein, the Seller shall promptly
have a substitute Assignment prepared or have such defect cured, as the case may
be, and thereafter cause each such Assignment to be duly recorded. In the event
that any Mortgage Note is endorsed in blank as of the Closing Date, promptly
following the Closing Date the Seller shall cause to be completed such
endorsements "Pay to the order of JPMorgan Chase Bank, as Trustee under the
Pooling and Servicing Agreement, dated as of July 1, 2004, among Credit-Based
Asset Servicing and Securitization LLC, Asset Backed Funding Corporation, Xxxxxx
Loan Servicing LP and JPMorgan Chase Bank, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB5, without recourse."
Section 2.03 Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Seller to the Purchaser
on the Closing Date, the Purchaser agrees to pay to the Seller on the Closing
Date by transfer of immediately available funds, as directed by the Seller, an
amount equal to $[_________] in respect of the Mortgage Loans (the "Purchase
Price"), net of an expense reimbursement amount of $[__________] (the "Expense
Reimbursement Amount"), and to transfer to the Seller or its designee on the
Closing Date the Class N, Class X, Class R and Class R-A Certificates
(collectively, the "Private Certificates"). The Expense Reimbursement Amount
shall reimburse the Purchaser for the Purchaser's Securities and Exchange
Commission registration statement fees and the Purchaser's registration
statement administration fees allocable to the Trust. The Seller shall pay, and
be billed directly for, all reasonable expenses incurred by the Purchaser in
connection with the issuance of the Certificates, including, without limitation,
printing fees incurred in connection with the prospectus relating to the
Certificates, blue sky registration fees and expenses, fees and reasonable
expenses of Purchaser's counsel, fees of the rating agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any. If the Purchaser shall
determine that the Expense Reimbursement Amount is not sufficient to reimburse
the Purchaser for all reasonable expenses incurred by it that are subject to
reimbursement by the Seller hereunder as described above, the Seller shall
promptly reimburse the Purchaser for such additional amounts upon written notice
by the Purchaser to the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans
The Seller hereby represents and warrants to the Purchaser, with
respect to the Mortgage Loans, that as of the Closing Date or as of such date
specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date.
(b) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property.
(c) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage and the interests
of the Certificateholders, and which have been delivered to the Trustee;
the substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the related
policy, and is reflected on the Mortgage Loan Schedule. No instrument of
waiver, alteration or modification has been executed, and no Mortgagor has
been released, in whole or in part, except, in connection with an
assumption agreement approved by the title insurer, to the extent required
by the policy and, in the case of an FHA Loan, to the extent required by
the related Insurance Agreement and which assumption agreement has been
delivered to the Trustee and the terms of which are reflected in the
Mortgage Loan Schedule.
(d) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and
the Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto.
(e) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, pursuant to insurance policies conforming
to the requirements of the Pooling and Servicing Agreement. All such
insurance policies contain a standard mortgagee clause naming the Seller,
its successors and assigns as mortgagee and all premiums thereon have been
paid. If upon origination of the Mortgage Loan, the Mortgaged Property was
in an area identified on a Flood Hazard Map or Flood Insurance Rate Map
issued by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to the
requirements of Xxxxxx Xxx and Xxxxxxx Mac. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to maintain such insurance at the Mortgagor's cost
and expense and to seek reimbursement therefor from the Mortgagor. All
acts required to be performed to preserve the rights and remedies of the
Trustee in any such insurance policies have been performed including,
without limitation, any necessary notifications of insurers and
assignments of policies or interests therein.
(f) Any and all requirements of any federal, state or local law,
including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, predatory and abusive lending laws or disclosure laws
applicable to the Mortgage Loans, including, without limitation, any
provisions relating to prepayment penalties, have been complied with.
(g) The Mortgage has not been satisfied, canceled, subordinated
(other than, with respect to second lien loans, the subordination to the
first lien loans) rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or
in part, nor has any instrument been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release.
(h) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (1) the lien of current real property
taxes and assessments not yet due and payable, (2) covenants, conditions
and restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and, in the case of FHA Loans, to the FHA and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan, (3) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property
and which may not in any way prevent realization of the benefits of the
related Insurance Agreement, if applicable, and (4) with respect to any
second lien mortgage loan, the lien of the related first mortgage loan.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates
a valid, existing and enforceable first or second lien and first or second
priority security interest on the property described therein and the
Seller has full right to sell and assign the same to the Purchaser.
(i) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms (including, without limitation,
any provisions therein relating to prepayment penalties).
(j) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the
mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage have been paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due to the mortgagee
pursuant to the Mortgage Note or Mortgage.
(k) Immediately prior to the transfer and assignment contemplated
herein, the Seller was the sole owner and holder of the Mortgage Loans and
has good and marketable title to each Mortgage Loan, free and clear of any
and all liens, pledges, charges, claims, participation interests,
mortgages, security interests or encumbrances or other interests of any
nature and has full right and authority to sell and assign the same.
(l) Each Mortgage Loan, unless listed on Exhibit V to the Pooling
and Servicing Agreement, is covered by an ALTA mortgagee title insurance
policy acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a title insurer
acceptable to (1) Xxxxxx Mae and Xxxxxxx Mac and (2) the FHA, in the case
of an FHA Loan and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring (subject to the exceptions
contained in (h)(1) and (2) above) the Seller, its successors and assigns
as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan and against any loss by reason of
the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the mortgage
interest rate and/or monthly payment including any negative amortization
thereunder. Additionally, such mortgagee title insurance policy
affirmatively insures ingress and egress to and from the Mortgaged
Property, and against encroachments by or upon the Mortgaged Property or
any interest therein. The Seller is the sole insured of such mortgagee
title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such mortgagee title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such mortgagee title
insurance policy.
(m) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with,
the lien of the related Mortgage.
(n) The collection practices used by the Servicer with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper,
prudent and customary in the mortgage servicing industry.
(o) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (1) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(2) otherwise by judicial foreclosure. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage. The Mortgagor has not notified the Seller and the
Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act.
(p) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage.
(q) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor.
(r) No Mortgage Loan contains provisions pursuant to which monthly
payments are (1) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, (2) paid by any source other than the Mortgagor
or (3) contains any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature.
(s) The Mortgage Note, the Mortgage, the Assignment and any other
documents required to be delivered with respect to each Mortgage Loan
pursuant to the Pooling and Servicing Agreement have been delivered to the
Trustee or its designee, all in compliance with the specific requirements
of the Pooling and Servicing Agreement.
(t) If the residential dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit
development project meets Xxxxxx Mae's eligibility requirements.
(u) None of the Mortgage Loans are secured by a leasehold estate or
constitute other than real property under applicable state law.
(v) The rights with respect to each Mortgage Loan are assignable by
the Seller without the consent of any Person other than consents which
will have been obtained on or before the Closing Date.
(w) The Mortgage Loans are not being transferred by the Seller with
any intent to hinder, delay or defraud any creditors of the Seller.
(x) All parties which have had any interest in each Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, and including,
without limitation, the Seller, are (or during the period in which they
held and disposed such interest, were) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the
property securing the Mortgage is located to the extent that any
non-compliance thereunder would affect the value or marketability of the
Mortgage Loans.
(y) To the best of Seller's knowledge, the Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or
regulation.
(z) The Mortgaged Property is free from material damage.
(aa) Each Mortgage Loan has been serviced by the Servicer in
accordance with the terms thereof and Applicable Regulations.
(bb) No Mortgage Loan was made in connection with (a) facilitating
the trade-in or exchange of a Mortgaged Property or (b) the construction
or rehabilitation of a Mortgaged Property, unless the Mortgage Loan is a
construction-to-permanent mortgage loan listed on the Mortgage Loan
Schedule which has been fully disbursed, all construction work is complete
and a completion certificate has been issued.
(cc) The Seller has fully furnished in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information on the Mortgagor credit files to Equifax, Experian
and Trans Union Credit Information Company on a monthly basis.
(dd) There is no proceeding pending for the total or partial
condemnation and no eminent domain proceedings pending affecting any
Mortgaged Property.
(ee) There was no fraud involved in the origination of any Mortgage
Loan by the applicable mortgagee or Mortgagor, and to the best of the
Seller's knowledge, there was no fraud by the appraiser or any other party
involved in the origination of any such Mortgage Loan.
(ff) Each mortgage file contains an appraisal of or a broker's price
opinion regarding the related Mortgaged Property indicating an appraised
value equal to the appraised value identified for such Mortgaged Property
on the Mortgage Loan Schedule. Each appraisal has been prepared on Xxxxxx
Xxx or Xxxxxxx Mac forms.
(gg) No improvements on any Mortgaged Property encroach on adjoining
properties (and in the case of a condominium unit, such improvements are
within the project with respect to that unit), and no improvements on
adjoining properties encroach upon such Mortgaged Property unless there
exists in the applicable Mortgage File a title policy with endorsements
which insure against losses sustained by the insured as a result of such
encroachments.
(hh) Each Insurance Agreement is in full force and effect and will
be in full force and effect upon the consummation of the transactions
contemplated by this Agreement.
(ii) With respect to escrow deposits, if any, all such payments are
in the possession of, or under the control of, the Servicer and there
exists no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits
or escrow advances or other charges or payments due the Servicer have been
capitalized under any Mortgage or the related Note.
(jj) No Mortgage Loan in provides for the payment of a prepayment
penalty beyond the five year term following the origination of such
Mortgage Loan.
(kk) No Mortgage Loan is subject to any pending bankruptcy or
insolvency proceeding. To the Seller's best knowledge, no material
litigation or lawsuit relating to any Mortgage Loan is pending.
(ll) The Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans originated or acquired by the Seller.
(mm) The sale, transfer, assignment and conveyance of Mortgage Loans
by the Seller pursuant to this Agreement will not result in any tax, fee
or governmental charge (other than income taxes and related taxes) payable
by the Seller, the Depositor or the Trustee to any federal, state or local
government other than taxes which have or will be paid by the Seller as
due ("Transfer Taxes"). In the event that the Depositor or the Trustee
receives actual notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of the Mortgage Loans, other than any taxes to
be paid by the creditor, on written demand by the Depositor or the
Trustee, or upon the Seller's otherwise being given notice thereof by the
Depositor or the Trustee, the Seller shall pay, and otherwise indemnify
and hold the Depositor and the Trustee harmless, on an after-tax basis,
from and against any and all such Transfer Taxes (it being understood that
the Certificateholders, the Trustee and the Depositor shall have no
obligation to pay such Transfer Taxes).
(nn) No Mortgage Loan is subject to the provisions of the Home
Ownership and Equity Protection Act of 1994, as amended, or in violation
of, or classified as a "high cost," "threshold," "predatory" or "covered"
loan under any other applicable state, federal or local law.
(oo) With respect to the Mortgage Loans, the Mortgaged Properties
securing repayment of the related Mortgage Note, consists of a fee simple
interest in a single parcel or two contiguous parcels of real property
improved by a (A) one-family dwelling, (B) two-to four family dwelling,
(C) one-family unit in a Xxxxxx Xxx eligible condominium project, (D)
one-family dwelling in a planned unit development which is not a
co-operative, (E) multi-family dwelling or (F) mobile home or manufactured
dwelling which constitutes real property.
(pp) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation
or event of acceleration except, in the case of an FHA Loan, by written
instruments, and the substance of which waiver has been approved by the
FHA to the extent required by the applicable Insurance Agreement.
(qq) The Seller has no actual knowledge that with respect to any
Mortgage Loan: (1) the Servicer has sent a notice of default to the
related Mortgagor which the Servicer is currently seeking to enforce or
(2) any foreclosure proceedings have been commenced or acceleration been
declared which is currently pending. The Seller is not transferring any
Mortgage Loan to the Purchaser with the intention or knowledge that the
Purchaser or the Trust will acquire the related Mortgaged Property.
(rr) As of the Cut-off Date, none of the Mortgage Loans are 30 or
more days contractually delinquent. The Seller has not waived any default,
breach, violation or event of acceleration, and the Seller has not taken
any action to waive any default, breach, violation or event of
acceleration, with respect to any Mortgage Loan.
(ss) Each Mortgage Loan is a "qualified Mortgage" within the meaning
of Section 860 G(a)(3) of the Code.
(tt) With respect to any Mortgage Loan which provides for an
adjustable-interest rate, all rate adjustments have been performed in
accordance with the terms of the related Mortgage Note or subsequent
modifications, if any.
(uu) None of the proceeds of any Mortgage Loan were used to finance
single-premium credit life insurance policies.
(vv) Each Mortgage Loan is directly secured by a Mortgage on a
residential property, and either (1) substantially all of the proceeds of
the Mortgage Loan were used to acquire, improve or protect the portion of
the residential property that consists of an interest in real property
(within the meaning of Treasury Regulations Sections 1.856-3(c) and
1.856-3(d)) and the interest in real property was the only security for
the Mortgage Loan as of the Testing Date (as defined below), or (2) the
fair market value of the interest in real property which secures the
Mortgage Loan was at least equal to 80% of the principal amount of the
Mortgage Loan (a) as of the Testing Date, or (b) as of the Closing Date.
For purposes of the previous sentence, (1) the fair market value of the
referenced interest in real property shall first be reduced by (a) the
amount of any lien on the interest in real property that is senior to the
Mortgage Loan, unless the Mortgage Loans include all of a first lien loan
and a second lien loan on the same Mortgaged Property, in which case the
80% test shall be applied in the aggregate, and (b) a proportionate amount
of any lien on the interest in real property that is on a parity with the
Mortgage Loan, and (2) the "Testing Date" shall be the date on which the
referenced Mortgage Loan was originated unless (a) the Mortgage Loan was
modified after the date of its origination in a manner that would cause
"significant modification" of the Mortgage Loan within the meaning of
Treasury Regulations Section 1.1001-3, and (b) the "significant
modification" did not occur at a time when the Mortgage Loan was in
default or when default with respect to the Mortgage Loan was reasonably
foreseeable.
(ww) With respect to each Mortgage Loan that is a mobile or
manufactured housing unit, such unit is a "single family residence" within
the meaning of Section 25(e)(1) of the Code, and has a minimum of 400
square feet of living space, a minimum width of 102 inches and is of a
kind customarily used at a fixed location.
(xx) None of the Mortgage Loans originated in the State of New York
are subject to Section 6.1 of the New York State Banking Law.
(yy) At the time of their origination, all FHA Loans conformed to
HUD origination guidelines.
(zz) No Mortgage Loan (other than a Mortgage Loan that would be
subject to the provisions of the Oakland, California or Los Angeles,
California predatory and abusive lending laws or a Mortgage Loan that is a
New Jersey covered purchase loan originated on or after November 27, 2003
through July 6, 2004) is a High Cost Loan or Covered Loan, as applicable
(as such terms are defined in Standard and Poor's, a division of The
XxXxxx-Xxxx Companies Inc.'s LEVELS(R) Glossary which is now Version 5.6
Revised, Appendix E) and no Mortgage Loan originated on or after October
1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.
With respect to the representations and warranties set forth in this
Section 3.01 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Depositor, the Seller,
the Servicer or the Trustee as set forth in Section 2.04 of the Pooling and
Servicing Agreement that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee then, notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty being inaccurate at the time the representation or warranty was made,
such inaccuracy shall be deemed a breach of the applicable representation or
warranty.
Upon discovery by the Depositor, the Seller, the Servicer, the
Purchaser or any assignee, transferee or designee of the Purchaser of a breach
of any of the representations and warranties contained in this Article III or
Section 2.04 of the Pooling and Servicing Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest therein of the
Purchaser or the Purchaser's assignee, transferee or designee, the party
discovering the breach shall give prompt written notice to the others. Within 90
days of the earlier of its discovery or its receipt of notice of any such breach
of a representation or warranty, the Seller shall promptly cure such breach in
all material respects, or in the event such breach cannot be cured, the Seller
shall repurchase the affected Mortgage Loan or cause the removal of such
Mortgage Loan from the Trust Fund and substitute for it one or more Eligible
Substitute Mortgage Loans, in either case, in accordance with Section 2.03 of
the Pooling and Servicing Agreement.
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 within 90 days of the
earlier of the Seller's discovery or receipt of notification if such defect
would cause the Mortgage Loan not to be a "qualified mortgage" for REMIC
purposes), or in the event such defect cannot be cured, the Seller shall
repurchase the affected Mortgage Loan or cause the removal of such Mortgage Loan
from the Trust Fund and substitute for it one or more Eligible Substitute
Mortgage Loans, in either case, within such time periods and in accordance with
Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.01 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser respecting a missing
or defective document or a breach of the representations or warranties contained
in this Section 3.01.
Section 3.02 Seller Representations and Warranties. The Seller
hereby represents and warrants to the Purchaser that as of the Closing Date or
as of such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of Delaware
and has the power and authority to own its assets and to transact the business
in which it is currently engaged. The Seller is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure to so qualify would have a material
adverse effect on (a) its business, properties, assets or condition (financial
or other), (b) the performance of its obligations under this Agreement, (c) the
value or marketability of the Mortgage Loans, or (d) its ability to foreclose on
the related Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the transactions
contemplated hereunder and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the Seller's legal, valid and binding
obligations enforceable in accordance with its terms, except as enforcement of
such terms may be limited by (1) bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies, (2) general
equity principals (regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (3) public policy considerations underlying
the securities laws, to the extent that such policy considerations limit the
enforceability of the provisions of this Agreement which purport to provide
indemnification from securities laws liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its business
as it is presently conducted, except for such licenses, certificates and permits
the absence of which, individually or in the aggregate, would not have a
material adverse effect on the ability of the Seller to conduct its business as
it is presently conducted. It is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations, or
registrations or declarations as shall have been obtained or filed, as the case
may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or constitute a
default under, any provision of any existing law or regulation or any order or
decree of any court applicable to the Seller or any of its properties or any
provision of its Limited Liability Company Agreement, or constitute a material
breach of, or result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to any mortgage, indenture,
contract or other agreement to which it is a party or by which it may be bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of any
pending insolvency.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to any
order or decree of any court, or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the Seller's condition (financial or otherwise)
or operations or any of the Seller's properties, or materially and adversely
affect the performance of any of its duties hereunder.
(ix) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely, would
prohibit the Seller from entering into this Agreement and the Pooling and
Servicing Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) that, if determined
adversely, would prohibit or materially and adversely affect the Seller's
performance of any of its respective obligations under, or the validity or
enforceability of, this Agreement and the Pooling and Servicing Agreement.
(x) The Seller is not transferring the Mortgage Loans to the
Purchaser hereunder with any intent to hinder, delay or defraud any of its
creditors.
(xi) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller pursuant to this Agreement are not subject to
the bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(xiii) The Seller understands that (a) the Private Certificates have
not been and will not be registered or qualified under the Securities Act of
1933, as amended (the "Securities Act") or registered or qualified under any
state securities law and are being transferred to the Seller in a transaction
that is exempt from the registration requirements of the Securities Act, (b) the
Purchaser is not required to so register or qualify the Private Certificates,
(c) the Private Certificates may be not be resold or transferred other than in
accordance with the Pooling and Servicing Agreement unless they are (1)
registered pursuant to the Securities Act and registered and qualified pursuant
to any state securities law, or (2) sold or transferred in transactions which
are exempt from such registration and qualification, (d) the Pooling and
Servicing Agreement contains restrictions regarding the transfer of the Private
Certificates and (e) the Private Certificates will bear a legend to the
foregoing effect.
(xiv) The Seller is acquiring the Private Certificates for its own
account for investment only and not with a view to or for sale in connection
with any distribution thereof in any manner that would violate the Securities
Act or any applicable state securities laws and the Seller will sell or transfer
the Private Certificates only in the manner contemplated by the Pooling and
Servicing Agreement.
(xv) The Seller (a) is a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the Private
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Private Certificates, (b) has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision, (c) is able to bear the economic risks of such an investment and (d)
is a qualified institutional buyer, as such term is defined in Rule 144A under
the Securities Act.
(xvi) The Seller confirms that (a) it has had the opportunity to ask
questions of and receive answers from the Purchaser concerning the purchase of
the Private Certificates and all matters relating thereto or any additional
information deemed necessary by the Seller to its decision to purchase the
Private Certificates and (b) it has undertaken its own independent analysis of
the investment in the Private Certificates. The Seller will not use or disclose
any information it receives in connection with its purchase of the Private
Certificates other than in connection with a subsequent sale of the Private
Certificates, except to the extent that any such information is publicly
available without the Seller's breach of its obligations specified in this
sentence.
(xvii) The Seller has not and will not nor has it authorized or will
it authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Private Certificate, any interest in any Private Certificate or any
other similar security to any person in any manner, (b) solicit any offer to buy
or to accept a pledge, disposition of other transfer of any Private Certificate,
any interest in any Private Certificate or any other similar security from any
person in any manner, (c) otherwise approach or negotiate with respect to any
Private Certificate, any interest in any Private Certificate or any other
similar security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner or (e) take
any other action, that (as to any of (a) through (d) above) would constitute a
distribution of any Private Certificate under the Securities Act, that would
render the disposition of any Private Certificate a violation of Section 5 of
the Securities Act or any state securities law, that would constitute a public
offering of the Private Certificates under the Securities Act or that would
require registration or qualification of the Private Certificates under the
Securities Act or any state or foreign securities laws. The Seller will not sell
or otherwise transfer any of the Private Certificates, except in compliance with
the provisions of the Pooling and Servicing Agreement.
(xviii) The Seller was not formed solely to acquire the Private
Certificates.
(xix) The Seller will not sell or otherwise transfer any Private
Certificates or interest therein except in compliance with the provisions of the
Pooling and Servicing Agreement.
(xx) The Seller is not an employee benefit plan or other retirement
arrangement subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), (collectively, an "ERISA Plan"), and is not acting on
behalf of, as named fiduciary of, as trustee of, or investing the assets of an
ERISA Plan.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller. (a) The Seller hereby
covenants that except for the transfer hereunder, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any lien on any Mortgage Loan, or any interest therein; the
Seller will notify the Trustee, as assignee of the Purchaser, of the existence
of any lien on any Mortgage Loan immediately upon discovery thereof, and the
Seller will defend the right, title and interest of the Trust, as assignee of
the Purchaser, in, to and under the Mortgage Loans, against all claims of third
parties claiming through or under the Seller; provided, however, that nothing in
this Section 4.01 shall prevent or be deemed to prohibit the Seller from
suffering to exist upon any of the Mortgage Loans any liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Seller shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) The Seller hereby covenants that neither it nor any affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller nor
any affiliate of the Seller shall be deemed to directly solicit any Mortgagor if
the Seller responds to a request from a Mortgagor regarding a refinancing or if
the Mortgagor receives marketing materials which are generally disseminated.
ARTICLE V
[Reserved]
ARTICLE VI
TERMINATION
Section 6.01 Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Article X of the Pooling and
Servicing Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Agreement may be amended from time to
time by the Seller and the Purchaser, by written agreement signed by the Seller
and the Purchaser.
Section 7.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 7.03 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
if to the Seller:
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
if to the Purchaser:
Asset Backed Funding Corporation.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
Section 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 7.05 Counterparts. This Agreement may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 7.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than the pledging of the Mortgage Loans by the Seller to
secure a loan by the Purchaser to the Seller. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes and all
other purposes as a sale by the Seller and a purchase by the Purchaser of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the characteristics of the Mortgage
Loans which will affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 7.08 Successors and Assigns; Assignment of this Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser and which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.
Section 7.09 Survival. The representations and warranties set forth
in Sections 3.01 and 3.02 hereof shall survive the purchase of the Mortgage
Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION,
as Purchaser
By:
------------------------------------
Name: Xxxxxxx X. Xxxxx-Xxxxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC,
as Seller
By:
------------------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Vice President
STATE OF NORTH CAROLINA)
) ss.:
COUNTY OF MECKLENBERG )
On the 12th day of August 2004 before me, a Notary Public in and for
said State, personally appeared Xxxxxxx X. Xxxxx-Xxxxxx, known to me to be a
Vice President of Asset Backed Funding Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 12th day of August 2004 before me, a Notary Public in and for
said State, personally appeared Xxxxxxxxx Xxxxxxxx, known to me to be a Vice
President of Credit-Based Asset Servicing and Securitization LLC, the company
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited liability company, and acknowledged to me
that such limited liability company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------------
Notary Public
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to
administer oaths, ______________________ who first being duly sworn deposes and
says: Deponent is ______________________ of ______________________________,
successor by merger to _________________________________________ ("Seller") and
who has personal knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown and
is presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.
Seller executes this Affidavit for the purpose of inducing JPMorgan
Chase Bank, as trustee on behalf of C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB5, to accept the transfer of the above described
loan from Seller.
Seller agrees to indemnify and hold harmless JPMorgan Chase Bank,
Asset Backed Funding Corporation, Banc of America Securities LLC and X.X. Xxxxxx
Securities 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 ____________.
EXHIBIT I
FORM OF ERISA REPRESENTATION
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Ladies and Gentlemen:
1. [The undersigned is the ______________________ of (the
"Transferee") a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.] [The undersigned,
___________________, is the transferee (the "Transferee").]
2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Asset Backed Funding
Corporation, as depositor (the "Depositor"), Credit-Based Asset Servicing and
Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as servicer, and
JPMorgan Chase Bank, as trustee (the "Trustee"), no transfer of the
ERISA-Restricted Certificates shall be permitted to be made to any person unless
the Depositor and the Certificate Registrar (as defined in the Agreement) have
received a certificate from such transferee in the form hereof.
3. The Transferee either (x) (i) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or a plan subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a governmental plan,
as defined in Section 3(32) of ERISA, subject to any federal, state or local law
("Similar Law") which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code, the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or
(ii) (except in the case of the Class R, Class R-A, Class N or Class X
Certificates) is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of a Class X, Class
N, Class R or Class R-A Certificate) shall deliver to the Certificate Registrar
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Certificate Registrar, and upon which the Certificate Registrar and the
Depositor shall be entitled to rely, to the effect that the purchase or holding
of such Certificate by the Transferee will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or Similar Law and will not subject the Trustee or the Depositor to any
obligation in addition to those undertaken by such entities in the Pooling and
Servicing Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
________________________________________
[Transferee]
By:_____________________________________
Name:
Title:
EXHIBIT J
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB5 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (e) we agree that the
Certificates must be held indefinitely by us and we acknowledge that we are able
to bear the economic risk of investment in the Certificates, (f) we have not
offered or sold any Certificates to, or solicited offers to buy any Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB5 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (d) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $____________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ 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.
----------
(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.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date:___________________________________
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB5
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is [an officer of] ____________________, the
proposed Transferee of an Ownership Interest in a [Class R and/or Class R-A
Certificates] (the "Residual Certificate") issued pursuant to the Pooling and
Servicing Agreement, (the "Agreement"), relating to the above-referenced
Certificates, among Asset Backed Funding Corporation, as depositor, Credit-Based
Asset Servicing and Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as
servicer, and JPMorgan Chase Bank, 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 the
Residual Certificate either (i) for its own account or (ii) as nominee, trustee
or agent for another Person who is a Permitted Transferee 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 Residual Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such transfer is through an agent (which includes a broker, nominee or
middleman) 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 Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record Holder of an interest in such entity. The
Transferee understands that, other than in the case of an "electing large
partnership" under Section 775 of the Code, 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.)
5. The Transferee has reviewed the provisions of Section 5.02 of the
Agreement and understands the legal consequences of the acquisition of the
Residual Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02 of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a transfer affidavit in the form
of this Affidavit from any Person to whom the Transferee attempts to transfer
the Residual Certificate, and in connection with any transfer by a Person for
whom the Transferee is acting as nominee, trustee or agent, and the Transferee
will not transfer the Residual Certificate or cause the Residual Certificate to
be transferred to any Person that the Transferee knows is not a Permitted
Transferee.
7. The Transferee historically has paid its debts as they have
become due.
8. 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 Residual Certificate.
9. The taxpayer identification number of the Transferee's nominee is
___________.
10. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
11. The Transferee is aware that the Residual Certificate may be a
"noneconomic residual interest" within the meaning of Treasury Regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
12. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.
13. If the Transferee is purchasing the Residual Certificate in a
transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.
14. The Transferee is not an employee benefit plan or arrangement,
including an individual retirement account, subject to ERISA, the Code or any
federal, state or local law which is similar to ERISA or the Code, and the
Transferee is not acting on behalf of such a plan or arrangement.
* * *
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 this _____ day of ________________, ____.
________________________________________
Print Name of Transferee
By:_____________________________________
Name:
Title:
Personally appeared before me the above-named
______________________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the _______________________ of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this _____ day of __________________,
____
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day of
______________, ____
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND FOR NON-ERISA INVESTORS
Check the appropriate box:
[_] The consideration paid to the Transferee to acquire the Residual
Certificate equals or exceeds the excess of (a) the present value of the
anticipated tax liabilities over (b) the present value of the anticipated
savings associated with holding such Residual Certificate, in each case
calculated in accordance with U.S. Treasury Regulations Sections
1.860E-1(c)(7) and (8), computing present values using a discount rate
equal to the short-term Federal rate prescribed by Section 1274(d) of the
Code and the compounding period used by the Transferee.
OR
[_] The transfer of the Residual Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from Residual Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the Transferee's
two fiscal years preceding the year of the transfer, the Transferee
had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning
of U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess
of $100 million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Residual Certificate only to
another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii) and
(iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to it to
acquire the Residual Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and reinvestment
assumptions, tax rates and other factors specific to the Transferee)
that it has determined in good faith; and
(v) in the event of any transfer of the Residual Certificate by the
Transferee, the Transferee will require its transferee to complete a
representation in the form of this Attachment A as a condition of
such transferee's purchase of the Residual Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
JPMorgan Chase Bank
4 New York Plaza, 6th Floor
New York, New York 10004
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB5 (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:_____________________________________
EXHIBIT M
[RESERVED]
EXHIBIT N
DTC LETTER OF REPRESENTATIONS
[Intentionally Omitted]
EXHIBIT O
[RESERVED]
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 Prepayment Period.
2. With respect to the Mortgage Pool, the amount of all partial Principal
Prepayments received by the Servicer during the related Prepayment Period.
3. With respect to the Mortgage Pool, the aggregate amount of principal
portion of all Monthly Payments received during the related Collection
Period.
4. With respect to the Mortgage Pool, the amount of interest received on the
Mortgage Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the aggregate amount of the Advances
made and recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the delinquency and foreclosure
information and the amount of Mortgage Loan Losses as of the close of
business of the last day of the preceding Collection 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 preceding Collection
Period preceding of the related Interest Accrual Period.
8. The Servicing Fees paid and Servicing Fees accrued during the related
Collection 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 and aggregate Principal Balance.
11. With respect to the Mortgage Pool, the number of Mortgage Loans
outstanding at the beginning and at the end of the related Collection
Period.
12. The aggregate interest accrued on the Mortgage Loans at their respective
Mortgage Interest Rates for the related Collection 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 Collection Period.
15. The amount of Yield Maintenance Agreement Payments received with respect
to such Distribution Date.
EXHIBIT Q
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
Officer's Certificate
C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB5
[Date]
Via Facsimile
JPMorgan Chase Bank, as Trustee
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 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 related
Mortgage Loan being in default or foreseeable default and such waiver (a)
was standard and customary in servicing mortgage loans similar to the
Mortgage Loans and (b) 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, (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 or (iii) the Servicer
not being provided with information sufficient to enable it to collect the
prepayment penalty;
4. We certify that all amounts due in connection with the waiver of a
prepayment penalty inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section 3.01 of the Pooling and
Servicing Agreement, have been or will be so deposited.
Capitalized terms used herein shall have the meanings ascribed to
such terms in the Pooling and Servicing Agreement, dated July 1, 2004, among
Asset Backed Funding Corporation, as depositor, Credit-Based Asset Servicing and
Securitization LLC, as seller, Xxxxxx Loan Servicing LP, as servicer, and
JPMorgan Chase Bank.
By: XXXXXX LOAN SERVICING LP
________________________________________
Name:
Title:
EXHIBIT R
FORM OF NOTICE OF PREPAYMENT PENALTY INCONSISTENCY
______________, 20__
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Pooling and Servicing Agreement (the "Agreement") dated as of July
1, 2004, among Asset Backed Funding Corporation, Credit-Based Asset
Servicing and Securitization LLC, Xxxxxx Loan Servicing LP and
JPMorgan Chase Bank C-BASS Mortgage Loan Asset Backed Certificates,
Series 2004-CB5
Ladies and Gentlemen:
Pursuant to Section 3.01 of the Agreement, we have determined the
following inconsistency between the amount of the prepayment penalty remitted by
the Servicer and the amount of the prepayment Penalty set forth in the Mortgage
Loan Schedule with respect to Mortgage Loan No. _____________:
JPMorgan Chase Bank
as Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT S
FORM OF YIELD MAINTENANCE AGREEMENT
[THE BANK OF NEW YORK LOGO]
Dated: July 30, 2004
Rate Cap Transaction
Re: BNY Reference No. 34495
Ladies and Gentlemen:
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the rate cap Transaction entered into on the Trade Date specified
below (the "Transaction") between The Bank of New York ("BNY"), a trust company
duly organized and existing under the laws of the State of New York and JPMorgan
Chase Bank, not in its individual capacity but solely as trustee (the "Trustee")
pursuant to the Pooling and Servicing Agreement, as defined herein (the
"Counterparty"). This Agreement, which evidences a complete and binding
agreement between you and us to enter into the Transaction on the terms set
forth below, constitutes a "Confirmation" as referred to in the "ISDA Form
Master Agreement" (as defined below), as well as a "Schedule" as referred to in
the ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). You and we have agreed to enter into this
Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master
Agreement (Multicurrency--Cross Border) form (the "ISDA Form Master
Agreement") but, rather, an ISDA Form Master Agreement shall be deemed to
have been executed by you and us on the date we entered into the
Transaction. In the event of any inconsistency between the provisions of
this Agreement and the Definitions or the ISDA Form Master Agreement, this
Agreement shall prevail for purposes of the Transaction.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any Calculation Period, the
amount set forth for such period on Schedule
I attached hereto
Trade Date: July 30, 2004
Effective Date: August 25, 2004
Termination Date: August 25, 2006, subject to adjustment in
accordance with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: August 12, 2004
Fixed Amount: USD 56,000.00
Floating Amounts:
Floating Rate Payer : BNY
Cap Rate : For each Calculation Period, as set forth
for such period on Schedule I attached
hereto
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
September 25, 2004 and ending on the
Termination Date, subject to adjustment in
accordance with the Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. The
Floating Rate Payer Payment Date shall be
two Business Days preceding each Floating
Rate Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA, provided, however, if the
Floating Rate Option for a Calculation
Period is greater than the Ceiling Rate (as
set forth for such period on Schedule I
attached hereto) then the Floating Rate
Option for such Calculation Period shall be
deemed equal to the Ceiling Rate.
Floating Amount: To be determined in accordance with the
following formula: Greater of (i) (Floating
Rate Option - Cap Rate) * Notional Amount *
Floating Rate Day Count Fraction; and (ii)
zero.
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York and London
Business Day
Convention: Modified Following
Calculation Agent: BNY
3. Additional Provisions:
Each party hereto is hereby advised and acknowledges that the other party has
engaged in (or refrained from engaging in) substantial financial transactions
and has taken (or refrained from taking) other material actions in reliance upon
the entry by the parties into the Transaction being entered into on the terms
and conditions set forth herein.
4. Provisions Deemed Incorporated in a Schedule to the Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
2) Termination Provisions. Subject to the provisions of paragraph 12
below, for purposes of the Master Agreement:
(a) "Specified Entity" is not applicable to BNY or Counterparty
for any purpose.
(b) "Breach of Agreement" provision of Section 5(a)(ii) will not
apply to BNY or Counterparty.
(c) "Credit Support Default" provisions of Section 5(a)(iii) will
not apply to BNY or Counterparty.
(d) "Misrepresentation" provisions of Section 5(a)(iv) will not
apply to BNY or Counterparty.
(e) "Default under Specified Transaction" is not applicable to BNY
or Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BNY or Counterparty.
(f) The "Cross Default" provisions of Section 5(a)(vi) will not
apply to BNY or to Counterparty.
(g) The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will not apply to BNY or Counterparty.
(h) The "Automatic Early Termination" provision of Section 6(a)
will not apply to BNY or to Counterparty.
(i) Payments on Early Termination. For the purpose of Section 6(e)
of this Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(j) "Termination Currency" means United States Dollars.
3) Tax Representations.
Payer Representations. For the purpose of Section 3(e) of this Agreement,
BNY and Counterparty make the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4 (a)(i)
or 4(a)(iii) of this Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4
(a)(i) or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice of its legal or
commercial position.
Payee Representations. For the purpose of Section 3(f) of this Agreement,
BNY and Counterparty make the following representations.
The following representation will apply to BNY:
BNY is a trust company duly organized and existing under the laws of
the State of New York and its U.S. taxpayer identification number is
000000000.
The following representation will apply to the Counterparty:
None
4) Documents to be delivered. For the purpose of Section 4(a):
Other documents to be delivered are:
Party required to Form/Document/ Date by which Covered by Section
deliver document Certificate to be delivered 3(d) Representation
----------------- ------------------ ----------------- -------------------
BNY Any documents Upon the Yes
required by the execution and
receiving party to delivery of this
evidence the Agreement and
authority of the such Confirmation
delivering party
or its Credit
Support Provider,
if any, for it to
execute and
deliver this
Agreement, any
Confirmation, and
any Credit Support
Documents to which
it is a party, and
to evidence the
authority of the
delivering party
or its Credit
Support Provider
to perform its
obligations under
this Agreement,
such Confirmation
and/or Credit
Support Document,
as the case may be
BNY A certificate of Upon the Yes
an authorized execution and
officer of the delivery of this
party, as to the Agreement and
incumbency and such Confirmation
authority of the
respective
officers of the
party signing this
Agreement, any
relevant Credit
Support Document,
or any
Confirmation, as
the case may be
Counterparty
Agreement (i) a copy of the Upon the Yes
executed Pooling execution and
and Servicing delivery of this
Agreement and (ii) Agreement and
an incumbency such Confirmation
certificate
verifying the true
signatures and
authority of the
person or persons
signing this
letter agreement
on behalf of the
Trustee
BNY A copy of the most Promptly after Yes
recent publicly request by the
available other party
regulatory call
report.
5) Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this Agreement:
Address for notices or communications to BNY:
The Bank of New York
Swaps and Derivative Products Group
Treasury Division
00 Xxx Xxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
(For all purposes)
Address for notices or communications to the Counterparty:
JPMorgan Chase Bank, as Trustee
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Institutional Trust
Services/Global Trust-C-BASS 2004-CB5
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxx, 00xx Xx
XX, XX 00000
Attn: Xxxxx Xxxxxxx
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
BNY appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement,; neither BNY nor the Counterparty have any Offices other than
as set forth in the Notices Section and BNY agrees that, for purposes of
Section 6(b) of this Agreement, it shall not in future have any Office
other than one in the United States
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
BNY is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BNY.
(f) Credit Support Document. Not applicable for either BNY or the
Counterparty.
(g) Credit Support Provider.
BNY: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole,
without regard to conflict of law provisions thereof other than New York
General Obligations Law Section 5-1401.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall
be held to be invalid or unenforceable (in whole or in part) for any
reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as
this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter of
this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the
parties.
The parties shall endeavor to engage in good faith negotiations to replace
any invalid or unenforceable term, provision, covenant or condition with a
valid or enforceable term, provision, covenant or condition, the economic
effect of which comes as close as possible to that of the invalid or
unenforceable term, provision, covenant or condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any
and all communications between officers or employees of the parties,
waives any further notice of such monitoring or recording, and agrees to
notify its officers and employees of such monitoring or recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any Proceedings relating to this Agreement or any
Credit Support Document.
(l) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Confirmation is executed by the Trustee (i)
this Confirmation is executed and delivered by JPMorgan Chase Bank, not in
its individual capacity but solely as Trustee pursuant to the Pooling and
Servicing Agreement dated as of July 1, 2004 among Asset Backed Funding
Corporation, as Depositor, Credit-Based Asset Servicing and Securitization
LLC, as Seller, Xxxxxx Loan Servicing LP, as Servicer and the Trustee
("the Pooling and Servicing Agreement") in the exercise of the powers and
authority conferred and vested in it thereunder (ii) each of the
representations, undertakings and agreements herein made on behalf of the
trust is made and intended not as personal representations of the Trustee
but is made and intended for the purpose of binding only the trust, and
(iii) under no circumstances will JPMorgan Chase Bank in its individual
capacity be personally liable for the payment of any indebtedness or
expenses or be personally liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken under
this Confirmation.
(m) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall be
permitted by either party unless each of Xxxxx'x Investors Services, Inc.
("Moody's") and Standard & Poors Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P"), has been provided notice of the same
and confirms in writing (including by facsimile transmission) within five
Business Days after such notice is given that it will not downgrade,
qualify, withdraw or otherwise modify its then-current rating of the
C-BASS Mortgage Loan Asset Backed Certificates, Series 2004-CB5 (the
"Certificates").
(n) Proceedings. BNY shall not institute against or cause any other person to
institute against, or join any other person in instituting against the
2004-CB5 Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law for a period of one year and one day (or, if
longer, the applicable preference period) following indefeasible payment
in full of the Certificates.
(o) Trustee Representation. The Trustee represents and warrants that:
It has the authority under the Pooling and Servicing Agreement to enter
into this letter agreement as Trustee on behalf of the 2004-CB5 Trust.
(p) The ISDA Form Master Agreement in hereby amended as follows:
The word "third" shall be replaced by the word "second" in the third line
of Section 5(a)(i) of the ISDA Form Master Agreement.
6) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date when it enters
into a Transaction that:--
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether
written or oral), other than the representations expressly made in
this Agreement or the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It is acting for its own account, has the capacity to
evaluate (internally or through independent professional
advice) the Transaction and has made its own decision to enter
into the Transaction; it is not relying on any communication
(written or oral) of the other party as investment advice or
as a recommendation to enter into such transaction; it being
understood that information and explanations related to the
terms and conditions of such transaction shall not be
considered investment advice or a recommendation to enter into
such transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and
conditions and to assume (and does, in fact assume) those
risks, financially and otherwise.
(3) Purpose. (A) It is an "eligible contract participant" within the
meaning of Section 1a(12) of the Commodity Exchange Act, as amended;
(B) this Agreement and each Transaction is subject to individual
negotiation by such party; and (C) neither this Agreement nor any
Transaction will be executed or traded on a "trading facility"
within the meaning of Section 1a(33) of the Commodity Exchange Act,
as amended.
(4) Principal. The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.
7) Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and all
rights it may have to set off, net, recoup or otherwise withhold or
suspend or condition payment or performance of any obligation between it
and the other party hereunder against any obligation between it and the
other party under any other agreements. The last sentence of the first
paragraph of Section 6(e) of the ISDA Form Master Agreement shall not
apply for purposes of this Transaction.
8) Additional Termination Events. Additional Termination Events will apply.
If a Ratings Event has occurred and BNY has not, within 30 days, complied
with Section 9 below, then an Additional Termination Event shall have
occurred with respect to BNY and BNY shall be the sole Affected Party with
respect to such an Additional Termination Event.
9) Ratings Event. If a Ratings Event (as defined below) occurs with respect
to BNY (or any applicable credit support provider), then BNY shall, at its
own expense, (i) assign this Transaction within thirty (30) days of such
Ratings Event to a third party that meets or exceeds, or as to which any
applicable credit support provider meets or exceeds, the Approved Ratings
Thresholds (as defined below) on terms substantially similar to this
Confirmation, which party is approved by the Counterparty, which approval
shall not be unreasonably withheld, (ii) obtain a guaranty of, or a
contingent agreement of, another person with the Approved Rating
Thresholds to honor BNY's obligations under this Agreement, provided that
such other person is approved by the Counterparty, such approval not to be
unreasonably withheld, (iii) post collateral under agreements and other
instruments satisfactory to Moody's, S&P, which will be sufficient to
restore the immediately prior ratings of the Certificates, or (iv)
establish any other arrangement satisfactory to Moody's and S&P which will
be sufficient to restore the immediately prior ratings of the
Certificates. For avoidance of doubt, a downgrade of the rating on the
Certificates could occur in the event that BNY does not post sufficient
collateral. For purposes of this Transaction, a "Ratings Event" shall
occur with respect to BNY (or any applicable credit support provider) if
its short-term unsecured and unsubordinated debt rating is withdrawn or
reduced below "A-1" by S&P or its short-term unsecured and unsubordinated
debt rating is withdrawn or reduced below "P-1" by Moody's (including in
connection with a merger, consolidation or other similar transaction by
BNY or any applicable credit support provider) such ratings being referred
to herein as the "Approved Ratings Thresholds," (unless, within 30 days
thereafter, each of Moody's and S&P has reconfirmed the ratings of the
Certificates, as applicable, which was in effect immediately prior
thereto).
10) Additional Provisions. Notwithstanding the terms of Sections 5 and 6 of
the ISDA Form Master Agreement, if Counterparty has satisfied its payment
obligations under Section 2(a)(i) of the ISDA Form Master Agreement, then
unless BNY is required pursuant to appropriate proceedings to return to
Counterparty or otherwise returns to Counterparty upon demand of
Counterparty any portion of such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect
to Counterparty shall not constitute an Event of Default or Potential
Event of Default with respect to Counterparty as the Defaulting Party and
(b) BNY shall be entitled to designate an Early Termination Date pursuant
to Section 6 of the ISDA Form Master Agreement only as a result of a
Termination Event set forth in either Section 5(b)(i) or Section 5(b)(ii)
of the ISDA Form Master Agreement with respect to BNY as the Affected
Party or Section 5(b)(iii) of the ISDA Form Master Agreement with respect
to BNY as the Burdened Party. For purposes of the Transaction to which
this Agreement relates, Counterparty's only obligation under Section
2(a)(i) of the ISDA Form Master Agreement is to pay the Fixed Amount on
the Fixed Rate Payer Payment Date.
11) BNY will, unless otherwise directed by the Trustee, make all payments
hereunder to the Trustee. Payment made to the Trustee at the account
specified herein or to another account specified in writing by the Trustee
shall satisfy the payment obligations of BNY hereunder to the extent of
such payment.
5. Account Details and
Settlement Information: Payments to BNY:
The Bank of New York
Derivative Products Support Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #000000000
Account #000-0000-000
Reference: Interest Rate Caps
Payments to Counterparty:
JPMorgan Chase Manhattan Bank
ABA#: 000000000
Account#: 00000000.8
Ref: C-BASS MORTGAGE LOAN ASSET BACKED
CERTIFICATE 2004-CB5
Attn: Xxxxx Xxxxxxx
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxxx Xxxx/Xxxxx Au-Xxxxx at
000-000-0000/5837. Once we receive this we will send you two original
confirmations for execution.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
By: ----------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
JPMorgan Chase Bank, not in its individual capacity but solely as Trustee,
pursuant to the POOLING AND SERVICING AGREEMENT.
By: ----------------------------
Name:
Title:
SCHEDULE I
all such dates subject to adjustment in accordance with the Business Day
Convention)
Beginning
Accrual Notional Amount Cap Rate Ceiling Rate
--------- --------------- -------- ------------
--
8/25/04 419,720,000 6.121% 8.120%
9/25/04 413,710,000 6.375% 8.117%
10/25/04 407,140,000 6.168% 8.113%
11/25/04 400,030,000 6.384% 8.108%
12/25/04 392,400,000 6.226% 8.103%
1/25/05 384,400,000 6.217% 8.097%
2/25/05 376,130,000 6.919% 8.091%
3/25/05 367,660,000 6.210% 8.085%
4/25/05 359,000,000 6.421% 8.078%
5/25/05 350,180,000 6.192% 8.071%
6/25/05 341,210,000 6.403% 8.063%
7/25/05 332,090,000 6.172% 8.055%
8/25/05 322,850,000 6.160% 8.045%
9/25/05 313,510,000 6.540% 8.036%
10/25/05 304,100,000 6.301% 8.025%
11/25/05 294,650,000 6.518% 8.014%
12/25/05 285,170,000 6.391% 8.003%
1/25/06 275,690,000 6.378% 7.990%
2/25/06 266,220,000 7.976% 7.976%
3/25/06 256,960,000 7.359% 7.966%
4/25/06 247,900,000 7.893% 7.958%
5/25/06 239,060,000 7.611% 7.950%
6/25/06 230,520,000 7.891% 7.941%
7/25/06 222,270,000 7.607% 7.932%
8/25/06 --
EXHIBIT T
Form of Certification
CERTIFICATION TO BE PROVIDED WITH FORM 10-K
2004-CB5 TRUST,
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB5
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing a copy of the monthly statement to certificateholders set
forth in Section 4.06 of the Pooling and Servicing Agreement, dated as of
July 1, 2004 (the "Agreement"), among Asset Backed Funding Corporation, as
depositor (the "Depositor"), Credit-Based Asset Servicing and
Securitization LLC, as seller (the "Seller"), Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), and JPMorgan Chase Bank, as trustee (the
"Trustee"), filed in respect of periods included in the year covered by
this annual report, of the 2004-CB5 Trust (the "Trust");
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Servicer under the Agreement for
inclusion in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon my knowledge and the annual compliance
review required under the Agreement, and except as disclosed in the
reports, the Servicer has fulfilled its obligations under the Agreement;
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports; and
6. In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: JPMorgan
Chase Bank.
By:_____________________________________
Name:
Title:
EXHIBIT U
Form of Certification to be Provided by the Trustee
2004-CB5 TRUST,
C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB5
Reference is made to the Pooling and Servicing Agreement, dated as
of July 1, 2004 (the "Pooling Agreement"), by and among JPMorgan Chase Bank (the
"Trustee"), Credit-Based Asset Servicing and Securitization LLC, as seller,
Xxxxxx Loan Servicing LP, as servicer (the "Servicer") and Asset Backed Funding
Corporation, as depositor (the "Depositor"). The Trustee hereby certifies to the
Servicer and its officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:
1. The Trustee has reviewed the annual report on Form 10-K for the calendar
year [____], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual
report, relating to the above-referenced trust;
2. Subject to paragraph (4), the distribution information in the distribution
reports contained in all Monthly Form 8-K's included in the year covered
by the annual report on Form 10-K for the calendar year [___], taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact required by the Pooling Agreement to be included
therein and 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;
3. The distribution information required to be provided by Trustee under the
Pooling Agreement is included in these reports; and
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 Agreement. The Trustee shall have no
responsibility or liability for any inaccuracy in such reports resulting
from information so provided by the Servicer.
JPMORGAN CHASE BANK, as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT V
SCHEDULE OF MORTGAGE LOANS WITHOUT TITLE POLICIES
[Intentionally Omitted]
EXHIBIT W
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 JPMorgan Chase Bank, having its
principal place of business at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, as Trustee (the "Trustee") pursuant to that Pooling and Servicing
Agreement among Asset Backed Funding Corporation (the "Depositor"), Xxxxxx Loan
Servicing LP (the "Servicer"), and the Trustee, dated as of July 1, 2004 (the
"Pooling and Servicing Agreement"), hereby constitutes and appoints the
Servicer, by and through the Servicer's officers, the Trustee's true and lawful
Attorney-in-Fact, in the Trustee's name, place and stead and for the Trustee's
benefit, in connection with all mortgage loans serviced by the Servicer pursuant
to the Pooling and Servicing Agreement for the purpose of performing all acts
and executing all documents in the name of the Trustee as may be customarily and
reasonably necessary and appropriate to effectuate the following enumerated
transactions in respect of any of the mortgages or deeds of trust (the
"Mortgages" and the "Deeds of Trust," respectively) and promissory notes secured
thereby (the "Mortgage Notes") for which the undersigned is acting as Trustee
for various certificateholders (whether the undersigned is named therein as
mortgagee or beneficiary or has become mortgagee by virtue of endorsement of the
Mortgage Note secured by any such Mortgage or Deed of Trust) and for which the
Servicer is acting as servicer, all subject to the terms of the Pooling and
Servicing Agreement.
This appointment shall apply to the following enumerated
transactions only:
1. The modification or re-recording of a Mortgage or Deed of Trust,
where said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the parties
thereto or to correct title errors discovered after such title insurance was
issued and said modification or re-recording, in either instance, does not
adversely affect the lien of the Mortgage or Deed of Trust as insured.
2. The subordination of the lien of a Mortgage or Deed of Trust to
an easement in favor of a public utility company of a government agency or unit
with powers of eminent domain; this section shall include, without limitation,
the execution of partial satisfactions/releases, partial reconveyances or the
execution or requests to trustees to accomplish same.
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 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.
IN WITNESS WHEREOF, JPMorgan Chase Bank as Trustee pursuant to that
Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of July 1, 2004 (C-BASS Mortgage Loan Asset Backed
Certificates, Series 2004-CB5), 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 ___________ this ___ day of __________, 2004.
JPMORGAN CHASE BANK, as Trustee
By:_____________________________________
Name:
Title:
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 Trustee for C-BASS
Mortgage Loan Asset Backed Certificates, Series 2004-CB5, and acknowledged that
s/he executed the same as her/his free act and deed and the free act and deed of
the Trustee.
Subscribed and sworn before me this _____ day of _____________, ____
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day of
______________, ____
