EXHIBIT 4
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ASSET BACKED FUNDING CORPORATION,
Depositor
OPTION ONE MORTGAGE CORPORATION,
Master Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2002
ABFC 2002-OPT1 Trust
ABFC Asset-Backed Certificates, Series 2002-OPT1
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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 [Reserved]........................................................
Section 2.05 Representations, Warranties and Covenants of the Master
Servicer..........................................................
Section 2.06 Representations and Warranties of the Depositor...................
Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.........................................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Master 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 Accounts; Deposits in Escrow
Accounts..........................................................
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.................
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements........................................................
Section 3.15 Notification of Adjustments.......................................
Section 3.16 Optional Purchases of Mortgage Loans by Master 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 Duties of Credit Risk Manager.....................................
Section 3.23 Obligations of the Master Servicer in Respect of
Compensating Interest.............................................
Section 3.24 Obligations of the Master 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 Master Servicer; Indemnification.....................
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties........................................................
Section 3.28 Protection of Assets..............................................
Section 3.29 Limitation of Liability of the Credit Risk Manager................
Section 3.30 Auction Administration Agreement; Swap Agreement..................
Section 3.31 No Personal Solicitation..........................................
Section 3.32 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 SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor................
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor..............
Section 6.03 Limitation on Liability of the Master Servicer and Others.........
Section 6.04 Master 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 Master 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 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.........
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........................................
Section 11.12 Assumption of Auction Administration Agreement and Swap
Agreement.........................................................
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-IO Form of Class AIO Certificates
Exhibit A-IO-INV Form of Class AIO-INV Certificates
Exhibit B Form of Class B Certificates
Exhibit C-1 Form of Class R 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 M-4 Certificates
Exhibit C-6 Form of Class M-5 Certificates
Exhibit C-7 Form of Class M-6 Certificates
Exhibit C-8 Form of Class CE Certificates
Exhibit C-9 Form of Class P Certificates
Exhibit D-1 Group 1 Mortgage Loan Schedule
Exhibit D-2 Group 2 Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Master Servicer
Exhibit N Form of Yield Maintenance Agreement
Exhibit O Form of Auction Administration Agreement
Exhibit P Form of Swap Agreement
Exhibit Q Form of Certification
Exhibit R-1 Form of Certification of the Trustee to be Provided to
Depositor
Exhibit R-2 Form of Certification of the Master Servicer to be Provided
to Depositor
Schedule I Prepayment Charge Schedule
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-IO Form of Class AIO Certificates
Exhibit A-IO-INV Form of Class AIO-INV Certificates
Exhibit B Form of Class B Certificates
Exhibit C-1 Form of Class R 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 M-4 Certificates
Exhibit C-6 Form of Class M-5 Certificates
Exhibit C-7 Form of Class M-6 Certificates
Exhibit C-8 Form of Class CE Certificates
Exhibit C-9 Form of Class P Certificates
Exhibit D-1 Group 1 Mortgage Loan Schedule
Exhibit D-2 Group 2 Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation
Exhibit J Form of Investment Letter
Exhibit K Form of Class R Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate
Exhibit M Monthly Information Provided by Master Servicer
Exhibit N Form of Yield Maintenance Agreement
Exhibit O Form of Auction Administration Agreement
Exhibit P Form of Swap Agreement
Exhibit Q Form of Certification
Exhibit R-1 Form of Certification of the Trustee to be Provided to
Depositor
Exhibit R-2 Form of Certification of the Master Servicer to be Provided
to Depositor
Schedule I Prepayment Charge Schedule
This Pooling and Servicing Agreement is dated as of September 1,
2002 (the "Agreement"), among ASSET BACKED FUNDING CORPORATION, as depositor
(the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as servicer (the "Master
Servicer"), and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of fourteen
Classes of Certificates, designated as (i) the Class A-1, Class A-2, Class AIO
and Class AIO-INV Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates, (iii) the Class B Certificates, (iv)
the Class CE Certificates, (v) the Class P Certificates and (vi) the Class R
Certificate.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as seven separate real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC Q," "REMIC
A," "REMIC B," "REMIC 1," "REMIC 2," REMIC 3" and "REMIC 4," respectively). The
Class T4-A1IO, Class T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class T4-M3IO, Class
T4-M4IO, Class T4-M5IO, Class T4-M6IO, Class T4-BIO, Class T4-4, Class T4-101,
Class T4-1010, Class T4-102, Class T4-1020, Class T4-11, Class T4-12 and Class
T4-13 Interests (such interests, the "REMIC 4 Components"), the Class T4-A1,
Class T4-A2, Class T4-M1, Class T4-M2, Class T4-M3, Class T4-M4, Class T4-M5,
Class T4-M6 and Class T4-B Interests and the Class AIO and Class AIO-INV
Certificates represent all of the "regular interests" in REMIC 4. Each Class of
Offered P&I Certificates represents beneficial ownership of the corresponding
REMIC 4 Regular Interest and the right to receive Cap Carryover Amounts. The
Class CE Certificates represent beneficial ownership of the REMIC 4 Components,
subject to the obligation to pay Cap Carryover Amounts. Each of the Class R-Q,
Class R-A, Class R-B, Class R-1, Class R-2, Class R-3 and Class R-4 Interests,
represented collectively by the Class R Certificate, represents the sole Class
of "residual interest" in REMIC Q, REMIC A, REMIC B, REMIC 1, REMIC 2, REMIC 3
and REMIC 4, respectively, for purposes of the REMIC Provisions. There are three
Classes of uncertificated REMIC Q Regular Interests (the Class TQ-1, Class TQ-2
and Class TQ-INV Interests), six Classes of uncertificated REMIC A Regular
Interests (the Class TA-1, Class TA-101, Class TA-102, Class TA-2, Class TA-INV
and Class TA-4 Interests), seven Classes of uncertificated REMIC B Regular
Interests (the Class TB-1, Class TB-101, Class TB-102, Class TB-2, Class TB-INV,
Class TB-AIO and Class TB-4 Interests), eight Classes of uncertificated REMIC 1
Regular Interests (the Class T1-1, Class T1-101, Class T1-102, Class T1-2, Class
T1-3, Class T1-4, Class T1-INV and Class T1-AIO Interests), eleven Classes of
uncertificated REMIC 2 Regular Interests (the Class T2-1, Class T2-101, Class
T2-102, Class T2-2, Class T2-3, Class T2-4, Class T2-INV, Class T2-AIO, Class
T2-11, Class T2-12 and Class T2-13 Interests), and nineteen Classes of
uncertificated REMIC 3 Regular Interests (the Class T3-A1, Class T3-A2, Class
T3-101, Class T3-1010, Class T3-102, Class T3-1020, Class T3-M1, Class T3-M2,
Class T3-M3, Class T3-M4, Class T3-M5, Class T3-M6, Class T3-B, Class T3-4,
Class T3-INV, Class T3-AIO, Class T3-11, Class T3-12 and Class T3-13 Interests).
Each Class of REMIC Q Regular Interests, REMIC A Regular Interests, REMIC B
Regular Interests, REMIC 1 Regular Interests, REMIC 2 Regular Interests, REMIC 3
Regular Interests and REMIC 4 Regular Interests and the Class AIO Certificates
are "REMIC Regular Interests." The REMIC Q Regular Interests will be held as
assets of REMIC A. The REMIC A Regular Interests will be held as assets of REMIC
B. The REMIC B Regular Interests will be held as assets of REMIC 1. The REMIC 1
Regular Interests will be held as assets of REMIC 2, the REMIC 2 Regular
Interests will be held as assets of REMIC 3 and the REMIC 3 Regular Interests
will be held as assets of REMIC 4. The REMIC 4 Regular Interests will be held as
assets of the Grantor Trust, which will also hold (i) the rights of the Offered
P&I Certificates to receive their respective Cap Carryover Amounts, (ii) the
Swap Agreement and the rights and obligations of the Class A-2 Certificates with
respect thereto, and (iii) the Yield Maintenance Agreement, the Reserve Account
and the beneficial interest of the Class CE Certificates with respect thereto,
subject to the obligation to pay Cap Carryover Amounts. The Class P Certificates
represent an interest in the Grantor Trust created hereunder and are entitled to
receive any Prepayment Charges with respect to the Mortgage Loans and any
Servicer Prepayment Charge Payment Amounts. The "latest possible maturity date"
for federal income tax purposes of all interests created hereby will be the
Distribution Date in October 2032.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance or Original
Notional Amount, for each Class of Certificates comprising the interests in the
Trust Fund created hereunder:
Original Class
Certificate
Principal Balance
or Original Pass-Through Assumed Final
Class Notional Amount Rate Maturity Dates
------- --------------------- ------------ ------------------
A-1 $391,222,000.00 (1) June 25, 2032
A-2 $125,860,000.00 (2) June 25, 2032
AIO $63,837,000.00 (3) N/A
AIO-INV $482,990,905.00 (4) July 25, 2032
M-1 $41,495,000.00 (5) May 25, 2032
M-2 $12,767,000.00 (6) April 25, 2032
M-3 $23,939,000.00 (7) March 25, 2032
M-4 $19,151,000.00 (8) February 25, 2032
M-5 $9,576,000.00 (9) October 25, 2031
M-6 $4,788,000.00 (10) March 25, 2031
B $6,383,000.00 (11) July 24, 2030
CE (12) X/X X/X
X X/X X/X X/X
X X/X X/X N/A
Total $635,181,000.00(13)
(1) Interest will accrue on the Class A-1 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-1
Pass-Through Rate and (ii) the Group 1 Cap for such Distribution Date.
(2) Interest will accrue on the Class A-2 Certificates during each Interest
Accrual Period at a rate equal to the lesser of: (i) the Class A-2
Pass-Through Rate and (ii) the Group 2 Cap for such Distribution Date.
(3) Interest will accrue on the Class AIO Certificates at a rate per annum
equal to 6.00% for the first ten Distribution Dates, 4.50% for the next
ten Distribution Dates and 2.50% for the next ten Distribution Dates. The
Class AIO Certificates will not bear interest after the Distribution Date
in March 2005.
(4) Interest will accrue on the Class AIO-INV Certificates at a rate per annum
equal to the greater of (i) 1.75% minus One-Month LIBOR and (ii) 0.00%.
(5) 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.
(6) 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.
(7) 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.
(8) Interest will accrue on the Class M-4 Certificates at a rate equal to the
lesser of: (i) the Class M-4 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(9) Interest will accrue on the Class M-5 Certificates at a rate equal to the
lesser of: (i) the Class M-5 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(10) Interest will accrue on the Class M-6 Certificates at a rate equal to the
lesser of: (i) the Class M-6 Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(11) Interest will accrue on the Class B Certificates at a rate equal to the
lesser of: (i) the Class B Pass-Through Rate and (ii) the Pool Cap for
such Distribution Date.
(12) The Class CE Certificates represent the beneficial ownership of the REMIC
4 Components in the aggregate.
(13) Exclusive of the Class AIO Notional Amount and the Class AIO-INV Notional
Amount.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Interest on all Classes of REMIC Regular
Interests and Certificates (other than the Class T3-A1 Interest, Class T3-101
Interest, Class T3-M1 Interest, Class T3-M2 Interest, Class T3-M3 Interest,
Class T3-M4 Interest, Class T3-M5 Interest, Class T3-M6 Interest, Class T4-A1
Interest, Class T4-101 Interest, Class T4-M1 Interest, Class T4-M2 Interest,
Class T4-M3 Interest, Class T4-M4 Interest, Class T4-M5 Interest, Class T4-M6
Interest and the Class A-1, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates) will be calculated on the basis of a 360-day
year consisting of twelve 30-day months. Interest on the Class T3-A1 Interest,
Class T3-101 Interest, Class T3-M1 Interest, Class T3-M2 Interest, Class T3-M3
Interest, Class T3-M4 Interest, Class T3-M5 Interest, Class T3-M6 Interest,
Class T4-A1 Interest, Class T4-101 Interest, Class T4-M1 Interest, Class T4-M2
Interest, Class T4-M3 Interest, Class T4-M4 Interest, Class T4-M5 Interest,
Class T4-M6 Interest and the Class A-1, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates will be calculated on the basis of the
actual number of days in the related Interest Accrual Period and a 360-day year.
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due and each Mortgage Loan relating to an REO Property. Any
Mortgage Loan which, on a 3-month rolling average basis, has made its scheduled
principal and interest payments will not be considered to be a 60+ Day
Delinquent Loan.
"Account": Any of the Collection Account, the Distribution Account,
the Reserve Account or the Escrow Account.
"Accrued Certificate Interest": With respect to each Distribution
Date and Class of Certificates, an amount equal to the interest accrued at the
applicable rate set forth or described opposite such Class in the table in the
Preliminary Statement during the related Interest Accrual Period on the
Certificate Principal Balance (or Notional Amount) of such Class of
Certificates, reduced by such Class's Interest Percentage of Relief Act Interest
Shortfalls for such Distribution Date.
"Adjustable-Rate Mortgage Loan": A Mortgage Loan which has a rate at
which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjusted Weighted Average Net Mortgage Rate": The weighted average
(based on Principal Balances 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
Class TB-1 Interest, the Class TB-2 Interest and the Class TB-4 Interest,
expressed as an annual rate and calculated on the basis of twelve months
consisting of 30 days each and a 360-day year.
"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 Schedules.
"Advance": As to any Mortgage Loan, any advance made by the Master
Servicer in respect of any Distribution Date pursuant to Section 4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto.
"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) 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 of
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Auction Administrator": The meaning given to such term in Section
3.30(a).
"Auction Administration Agreement": The Auction Administration
Agreement, dated September 26, 2002, between Bank of America, N.A. and the
Auction Administrator.
"Available Funds": As to any Distribution Date, an amount equal to
the excess of (i) the sum of (a) the aggregate of the Monthly Payments due and
received during the related Collection Period and remitted to the Trustee by the
Master Servicer one Business Day prior to the related Distribution 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 and other unscheduled recoveries
of principal and interest (excluding Prepayment Charges and Servicer Prepayment
Charge Payment Amounts) in respect of the Mortgage Loans during the related
Prepayment Period, (c) the aggregate of any amounts received in respect of an
REO Property 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 Master Servicer for such Distribution Date over (ii)
the sum of (a) amounts reimbursable or payable to the Master Servicer pursuant
to Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the Trustee
pursuant to Section 8.05 (other than Trustee Fees), (c) Stayed Funds, (d) the
Servicing Fee and (e) 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 Class A-1, Class A-2, Class AIO, Class AIO-INV, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5 and Class M-6 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 California, Commonwealth of Pennsylvania or in the city in which the
Corporate Trust Office of the Trustee is located are authorized or obligated by
law or executive order to be closed.
"Cap": Any of the Group 1 Cap, the Group 2 Cap or the Pool Cap.
"Cap Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for any Offered Certificate (other than a Class AIO or a
Class AIO-INV Certificate) is based upon a 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
related Cap (provided, that in the case of the Class A-1 and Class A-2
Certificates, the Cap shall be determined solely for federal income tax purposes
based on the lower of the applicable Group Cap and the Pool Cap), together with
the unpaid portion of any such excess from prior Distribution Dates (and
interest accrued thereon at the then applicable Pass-Through Rate on such
Certificate).
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Custodian": Initially, Xxxxx Fargo Bank Minnesota,
National Association; thereafter any other Certificate Custodian acceptable to
the Depository and selected by the Trustee.
"Certificate Owner": With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates (other than the Class AIO, Class AIO-INV, Class CE, Class P and
Class R Certificates) and any Distribution Date, the Original Class Certificate
Principal Balance reduced by the sum of (i) all amounts actually distributed in
respect of principal of such Class on all prior Distribution Dates and (ii)
Applied Realized Loss Amounts allocated thereto. The Class AIO, Class AIO-INV,
Class CE, Class P and Class R Certificates do not have a Certificate Principal
Balance. With respect to any Certificate (other than a Class AIO, Class AIO-INV,
Class CE, Class P or Class R Certificate) of a Class and any Distribution Date,
the portion of the Certificate Principal Balance of such Class represented by
such Certificate equal to the product of the Percentage Interest evidenced by
such Certificate and the Certificate Principal Balance of such Class.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of the Class
R Certificate for any purpose hereof.
"Certification": As defined in Section 3.32(b) hereof.
"Class": Collectively, Certificates or REMIC Regular Interests which
have the same priority of payment and bear the same class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.330% per annum, and (ii) following the
Optional Termination Date, 0.660% per annum.
"Class A-1 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to the lesser of (a) One-Month LIBOR as of the related LIBOR
Determination Date, plus the Class A-1 Certificate Margin and (b) the Group 1
Maximum Rate Cap.
"Class A-1 Principal Distribution Amount": As of any Distribution
Date, the lesser of (i) the Certificate Principal Balance of the Class A-1
Certificates immediately prior to such Distribution Date and (ii) the Group 1
Principal Percentage of the Senior Principal Distribution Amount.
Class A-1 REMIC Pass-Through Rate": The least of (a) the Class A-1
Pass-Through Rate, (b) the Pool Cap and (c) the Group 1 Cap.
"Class A-2 Certificate Margin": For each Distribution Date after the
Distribution Date in September 2004, (i) on or prior to the Optional Termination
Date, 0.750% per annum, and (ii) following the Optional Termination Date, 1.125%
per annum.
"Class A-2 Pass-Through Rate": For each Distribution Date, a rate
per annum equal to (i) prior to or on the Distribution Date in September 2004,
2.734% and (ii) after the Distribution Date in September 2004, the lesser of (a)
One-Month LIBOR as of the related LIBOR Determination Date, plus the Class A-2
Certificate Margin and (b) the Group 2 Maximum Rate Cap.
"Class A-2 Principal Distribution Amount": As of any Distribution
Date, the lesser of (i) the Certificate Principal Balance of the Class A-2
Certificates immediately prior to such Distribution Date and (ii) the Group 2
Principal Percentage of the Senior Principal Distribution Amount.
"Class A-2 REMIC Pass-Through Rate": The least of (a) the Class A-2
Pass-Through Rate, (b) the Pool Cap and (c) the Group 2 Cap.
"Class AIO Certificate": A regular interest in REMIC 4 that has a
Notional Amount equal to the Class TA-2 Principal Amount and bears interest at
the Class AIO Pass-Through Rate.
"Class AIO Pass-Through Rate": For each Distribution Date (i)
through and including the Distribution Date in July 2003, 6.00% per annum, (ii)
from and including the Distribution Date in August 2003 through and including
the Distribution Date in May 2004, 4.50% per annum, (iii) from and including the
Distribution Date in June 2004 through and including the Distribution Date in
March 2005, 2.50% per annum, and (iv) after the Distribution Date in March 2005,
0%.
"Class AIO-INV Certificate": A regular interest in REMIC 4 that has
a Notional Amount equal to the Class TQ-1 Principal Amount and bears interest at
the Class AIO-INV Pass-Through Rate.
"Class AIO-INV Pass-Through Rate": For each Distribution Date, a
rate per annum equal to the greater of (i) 1.75% minus One-Month LIBOR and (ii)
0.00%.
"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, A-IO and A-IO-INV, 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 B Certificate": Any one of the Certificates with a "B"
designated on the face thereof substantially in the form annexed hereto as
Exhibit B, 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 Pass-Through Rate": For each Distribution Date, a rate per
annum equal to 7.50%.
"Class B Principal Distribution Amount": As of any Distribution Date
on or after the Stepdown Date and as long as a Trigger Event is not in effect,
the excess of (x) the sum of (i) the sum of the Certificate Principal Balances
of the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class M-4 Certificates (after taking into account the
payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates
(after taking into account the payment of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date) and (viii) the
Certificate Principal Balance of the Class B Certificates immediately prior to
such Distribution Date) over (y) the lesser of (A) the product of (i) 99.00% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class B Realized Loss Amortization Amount": As to the Class B
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxii) hereof, in each
case for such Distribution Date.
"Class B REMIC Pass-Through Rate": The lesser of (a) the Class B
Pass-Through Rate and (b) the Pool Cap.
"Class CE Certificates": Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-8, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class CE Distributable Amount": With respect to any Distribution
Date, the sum of (i) the aggregate of amounts distributable on the REMIC 4
Components for such Distribution Date remaining after the distributions in
Section 4.02(b)(i)-(xxiv) and (ii) the aggregate of amounts remaining in the
Reserve Account after the distributions in Section 3.04(g)(i)(A).
"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, Exhibit C-4, Exhibit C-5, Exhibit C-6 and Exhibit C-7,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein.
"Class 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, 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 M-4 Applied
Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6
Applied Realized Loss Amount and the Class B 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, 0.730% per annum, and (ii) following the
Optional Termination Date, 1.095% per annum.
"Class M-1 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-1 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-1 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 75.00% and
(ii) the Pool Balance as of the last day of the related Collection Period and
(B) the Pool Balance as of the last day of the related Collection Period minus
the product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (iv) hereof, in each case
for such Distribution Date.
"Class M-1 REMIC Pass-Through Rate": The lesser of (a) the Class M-1
Pass-Through Rate and (b) the Pool Cap.
"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, 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 M-4 Applied Realized Loss Amount, the Class M-5
Applied Realized Loss Amount, the Class M-6 Applied Realized Loss Amount and the
Class B Applied Realized Loss Amount as of such Distribution Date.
"Class M-2 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.930% per annum, and (ii) following the
Optional Termination Date, 1.395% per annum.
"Class M-2 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-2 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-2 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 79.00% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (vii) hereof, in each
case for such Distribution Date.
"Class M-2 REMIC Pass-Through Rate": The lesser of (a) the Class M-2
Pass-Through Rate and (b) the Pool Cap.
"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, 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 M-4 Applied
Realized Loss Amount, the Class M-5 Applied Realized Loss Amount, the Class M-6
Applied Realized Loss Amount and the Class B Applied Realized Loss Amount 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, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-3 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-3 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), and (iv) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 86.50% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-3 Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (x) hereof, in each case
for such Distribution Date.
"Class M-3 REMIC Pass-Through Rate": The lesser of (a) the Class M-3
Pass-Through Rate and (b) the Pool Cap.
"Class M-4 Applied Realized Loss Amount": As to the Class M-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, but prior to the
application of the Class M-4 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-5 Applied
Realized Loss Amount, the Class M-6 Applied Realized Loss Amount and the Class B
Applied Realized Loss Amount as of such Distribution Date.
"Class M-4 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 1.850% per annum, and (ii) following the
Optional Termination Date, 2.775% per annum.
"Class M-4 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-4 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-4 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates immediately prior to such Distribution
Date and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 92.50% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-4 Realized Loss Amortization Amount": As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiii) hereof, in each
case for such Distribution Date.
"Class M-4 REMIC Pass-Through Rate": The lesser of (a) the Class M-4
Pass-Through Rate and (b) the Pool Cap.
"Class M-5 Applied Realized Loss Amount": As to the Class M-5
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, but prior to the
application of the Class M-5 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-6 Applied
Realized Loss Amount and the Class B Applied Realized Loss Amount as of such
Distribution Date.
"Class M-5 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 2.150% per annum, and (ii) following the
Optional Termination Date, 3.225% per annum.
"Class M-5 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-5 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-5 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date) and (vi) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 95.50% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Cut-off Date
Aggregate Principal Balance.
"Class M-5 Realized Loss Amortization Amount": As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvi) hereof, in each
case for such Distribution Date.
"Class M-5 REMIC Pass-Through Rate": The lesser of (a) the Class M-5
Pass-Through Rate and (b) the Pool Cap.
"Class M-6 Applied Realized Loss Amount": As to the Class M-6
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, but prior to the
application of the Class M-6 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 Class B Applied Realized Loss
Amount as of such Distribution Date.
"Class M-6 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 3.250% per annum, and (ii) following the
Optional Termination Date, 4.875% per annum.
"Class M-6 Pass-Through Rate": For each Distribution Date, the
lesser of (a) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class M-6 Certificate Margin and (b) the Pool Maximum Rate Cap.
"Class M-6 Principal Distribution Amount": As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Certificate Principal
Balances of the Class A Certificates (after taking into account the payment of
the Senior Principal Distribution Amount on such Distribution Date), (ii) the
Certificate Principal Balance of the Class M-1 Certificates (after taking into
account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal
Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of
the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such
Distribution Date), (vi) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Certificate
Principal Balance of the Class M-6 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 97.00% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Cut-off Date Aggregate Principal Balance.
"Class M-6 Realized Loss Amortization Amount": As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xix) hereof, in each
case for such Distribution Date.
"Class M-6 REMIC Pass-Through Rate": The lesser of (a) the Class M-6
Pass-Through Rate and (b) the Pool Cap.
"Class P Certificate": Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-9, executed by the Trustee on behalf of the Trust and authenticated
and delivered by the Certificate Registrar, representing the right to
distributions as set forth herein and therein.
"Class 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 Q, REMIC
A, REMIC B, REMIC 1, REMIC 2, REMIC 3 and REMIC 4. The Class R Certificate
represents the ownership of the Class R-Q Interest, Class R-A Interest, Class
R-B Interest, Class R-1 Interest, Class R-2 Interest, Class R-3 Interest and
Class R-4 Interest.
"Class R-Q Interest": The uncertificated residual interest in REMIC
Q.
"Class R-A Interest": The uncertificated residual interest in REMIC
A.
"Class R-B Interest": The uncertificated residual interest in REMIC
B.
"Class R-1 Interest": The uncertificated residual interest in REMIC
1.
"Class R-2 Interest": The uncertificated residual interest in REMIC
2.
"Class R-3 Interest": The uncertificated residual interest in REMIC
3.
"Class R-4 Interest": The uncertificated residual interest in REMIC
4.
"Class TA-1 Interest": A regular interest in REMIC A that is held as
an asset of REMIC B and has a principal balance equal to the Class TA-1
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class TA-1 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to (a) the Pool Balance minus (b) the sum of (1) the Remaining
Initial Overcollateralization Amount, (2) the Remaining Marker Amounts and (3)
the Class TA-2 Principal Amount.
"Class TA-101 Interest": A regular interest in REMIC A that is held
as an asset of REMIC B and has a principal balance equal to the Class TA-101
Principal Amount and bears interest at the INV Adjusted Group 1 Weighted Average
Net Mortgage Rate.
"Class TA-101 Principal Amount": As of any Distribution Date, 1.0%
of the aggregate Principal Balance of the Group 1 Mortgage Loans.
"Class TA-102 Interest": A regular interest in REMIC A that is held
as an asset of REMIC B and has a principal balance equal to the Class TA-102
Principal Amount and bears interest at the Weighted Average Net Mortgage Rate of
the Group 2 Mortgage Loans.
"Class TA-102 Principal Amount": As of any Distribution Date, 1.0%
of the aggregate Principal Balance of the Group 2 Mortgage Loans.
"Class TA-2 Interest": A regular interest in REMIC A that is held as
an asset of REMIC B and has a principal balance equal to the Class TA-2
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class TA-2 Principal Amount": As of any Distribution Date, an
amount equal to (a) $63,837,000 minus (b) any principal payments and Applied
Realized Loss Amounts previously applied to reduce the Class TA-2 Principal
Amount.
"Class TA-4 Interest": A regular interest in REMIC A that is held as
an asset of REMIC B and has a principal balance equal to the Class TA-4
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class TA-4 Principal Amount": As of any Distribution Date, an
amount equal to (a) the Initial Overcollateralization Amount minus (b) any
principal payments and Realized Losses and accreted interest allocated to the
Class TA-4 Interest as set forth in Section 4.08(e).
"Class TA-INV Interest": A regular interest in REMIC A that is held
as an asset of REMIC B and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class TB-1 Interest": A regular interest in REMIC B that is held as
an asset of REMIC 1 and has a principal balance equal to the Class TA-1
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class TB-2 Interest": A regular interest in REMIC B that is held as
an asset of REMIC 1 and has a principal balance equal to the Class TA-2
Principal Amount and bears interest at a rate equal to the excess of (a) the INV
Adjusted Weighted Average Net Mortgage Rate over (b) the Class AIO Pass-Through
Rate.
"Class TB-101 Interest": A regular interest in REMIC B that is held
as an asset of REMIC 1 and has a principal balance equal to the Class TA-101
Principal Amount and bears interest at the INV Adjusted Group 1 Weighted Average
Net Mortgage Rate.
"Class TB-102 Interest": A regular interest in REMIC B that is held
as an asset of REMIC 1 and has a principal balance equal to the Class TA-102
Principal Amount and bears interest at the Weighted Average Net Mortgage Rate of
the Group 2 Mortgage Loans.
"Class TB-AIO Interest": A regular interest in REMIC B that is held
as an asset of REMIC 1 and has a notional balance equal to the Class TA-2
Principal Amount and bears interest at the Class AIO Pass-Through Rate.
"Class TB-INV Interest": A regular interest in REMIC B that is held
as an asset of REMIC 1 and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class TB-4 Interest": A regular interest in REMIC B that is held as
an asset of REMIC 1 and has a principal balance equal to the Class TA-4
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class TQ-1 Interest": A regular interest in REMIC Q that is held as
an asset of REMIC A and has a principal balance equal to the Class TQ-1
Principal Amount and bears interest at the INV Adjusted Group 1 Weighted Average
Net Mortgage Rate.
"Class TQ-1 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to the Principal Balance of the Group 1 Mortgage Loans.
"Class TQ-2 Interest": A regular interest in REMIC Q that is held as
an asset of REMIC A and has a principal balance equal to the Class TQ-2
Principal Amount and bears interest at the Weighted Average Net Mortgage Rate of
the Group 2 Mortgage Loans.
"Class TQ-2 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to the Principal Balance of the Group 2 Mortgage Loans.
"Class TQ-INV Interest": A regular interest in REMIC Q that is held
as an asset of REMIC A and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class T1-1 Interest": A regular interest in REMIC 1 that is held as
an asset of REMIC 2 and has a principal balance equal to the Class T1-1
Principal Amount and bears interest at the Adjusted Weighted Average Net
Mortgage Rate.
"Class T1-1 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to 97% of the Pool Balance minus the Remaining Initial
Overcollateralization Amount.
"Class T1-101 Interest": A regular interest in REMIC 1 that is held
as an asset of REMIC 2 and has a principal balance equal to the Class TA-101
Principal Amount and bears interest at the INV Adjusted Group 1 Weighted Average
Net Mortgage Rate.
"Class T1-102 Interest": A regular interest in REMIC 1 that is held
as an asset of REMIC 2 and has a principal balance equal to the Class TA-102
Principal Amount and bears interest at the Weighted Average Net Mortgage Rate of
the Group 2 Mortgage Loans.
"Class T1-2 Interest": A regular interest in REMIC 1 that is held as
an asset of REMIC 2 and has a principal balance equal to the Class T1-2
Principal Amount and bears interest at the Adjusted Weighted Average Net
Mortgage Rate.
"Class T1-2 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to 1% of the excess of (a) the excess of (i) the Pool Balance over
(ii) the Remaining Initial Overcollateralization Amount over (b) the Subsequent
Overcollateralization Amount.
"Class T1-3 Interest": A regular interest in REMIC 1 that is held as
an asset of REMIC 2 and has a principal balance equal to the Class T1-3
Principal Amount and bears interest at the Adjusted Weighted Average Net
Mortgage Rate.
"Class T1-3 Principal Amount": As of any Distribution Date, after
the application of principal payments and Applied Realized Loss Amounts, an
amount equal to 1% of the sum of (a) the excess of (i) the Pool Balance over
(ii) the Remaining Initial Overcollateralization Amount and (b) the Subsequent
Overcollateralization Amount.
"Class T1-4 Interest": A regular interest in REMIC 1 that is held as
an asset of REMIC 2 and has a principal balance equal to the Class TA-4
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class T1-AIO Interest": A regular interest in REMIC 1 that is held
as an asset of REMIC 2 and has a notional balance equal to the Class TA-2
Principal Amount and bears interest at the Class AIO Pass-Through Rate.
"Class T1-INV Interest": A regular interest in REMIC 1 that is held
as an asset of REMIC 2 and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class T1-4 Principal Amount": As of any Distribution Date, an
amount equal to (a) the Initial Overcollateralization Amount minus (b) any
principal payments and Realized Losses and accreted interest allocated to the
Class T1-4 Interest as set forth in Section 4.08(d).
"Class T2-1 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a principal balance equal to the Class T1-1
Principal Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-101 Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a principal balance equal to the Class TA-101
Principal Amount and bears interest at the INV Adjusted Group 1 Weighted Average
Net Mortgage Rate.
"Class T2-102 Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a principal balance equal to the Class TA-102
Principal Amount and bears interest at the Weighted Average Net Mortgage Rate of
the Group 2 Mortgage Loans.
"Class T2-2 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a principal balance equal to the Class T1-2
Principal Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-3 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a principal balance equal to the Class T1-3
Principal Amount and bears interest at the REMIC 2 Pass-Through Rate.
"Class T2-4 Interest": A regular interest in REMIC 2 that is held as
an asset of REMIC 3 and has a principal balance equal to the Class TA-4
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class T2-11 Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a notional balance equal to the sum of (x) the
Class T1-1 Principal Amount and (y) the Remaining Marker Amounts and bears
interest at (a) the Adjusted Weighted Average Net Mortgage Rate minus (b) the
REMIC 2 Pass-Through Rate.
"Class T2-12 Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a notional balance equal to the Class T1-2
Principal Amount and bears interest at (a) the Adjusted Weighted Average Net
Mortgage Rate minus (b) the REMIC 2 Pass-Through Rate.
"Class T2-13 Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a notional balance equal to the Class T1-3
Principal Amount and bears interest at (a) the Adjusted Weighted Average Net
Mortgage Rate minus (b) the REMIC 2 Pass-Through Rate.
"Class T2-AIO Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a notional balance equal to the Class TA-2
Principal Amount and bears interest at the Class AIO Pass-Through Rate.
"Class T2-INV Interest": A regular interest in REMIC 2 that is held
as an asset of REMIC 3 and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class T3-A1 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to (a) the Certificate
Principal Balance of the Class A-1 Certificates minus (b) the Remaining Marker
Amounts and bears interest at the Pool Cap.
"Class T3-A2 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to (a) the Certificate
Principal Balance of the Class A-2 Certificates minus (b) the Remaining Marker
Amounts and bears interest at the Pool Cap.
"Class T3-101 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Class TA-101
Principal Amount and bears interest at the Group 1 Cap.
"Class T3-1010 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class TA-101
Principal Amount and bears interest at the excess, if any, of (a) the INV
Adjusted Group 1 Weighted Average Net Mortgage Rate over (b) the Group 1 Cap.
"Class T3-102 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Class TA-102
Principal Amount and bears interest at the Group 2 Cap.
"Class T3-1020 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class TA-102
Principal Amount and bears interest at the excess, if any, of (a) the Weighted
Average Net Mortgage Rate of the Group 2 Mortgage Loans over (b) the Group 2
Cap.
"Class T3-AIO Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class TA-2
Principal Amount and bears interest at the Class AIO Pass-Through Rate.
"Class T3-B Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class B Certificates and bears interest at the Pool
Cap.
"Class T3-INV Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class TQ-1
Principal Amount and bears interest at the Class AIO-INV Pass-Through Rate.
"Class T3-M1 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-1 Certificates and bears interest at the Pool
Cap.
"Class T3-M2 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-2 Certificates and bears interest at the Pool
Cap.
"Class T3-M3 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-3 Certificates and bears interest at the Pool
Cap.
"Class T3-M4 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-4 Certificates and bears interest at the Pool
Cap.
"Class T3-M5 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-5 Certificates and bears interest at the Pool
Cap.
"Class T3-M6 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a principal balance equal to the Certificate
Principal Balance of the Class M-6 Certificates and bears interest at the Pool
Cap.
"Class T3-4 Interest": A regular interest in REMIC 3 that is held as
an asset of REMIC 4 and has a principal balance equal to the Class TA-4
Principal Amount and bears interest at the INV Adjusted Weighted Average Net
Mortgage Rate.
"Class T3-11 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the sum of (x) the
Class T1-1 Principal Amount and (y) the Remaining Marker Amounts and is entitled
to all interest distributions on the Class T2-11 Interest.
"Class T3-12 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class T1-2
Principal Amount and is entitled to all interest distributions on the Class
T2-12 Interest.
"Class T3-13 Interest": A regular interest in REMIC 3 that is held
as an asset of REMIC 4 and has a notional balance equal to the Class T1-3
Principal Amount and is entitled to all interest distributions on the Class
T2-13 Interest.
"Class T4-A1 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class A-1 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class A-1
Certificates and bears interest at the Class A-1 REMIC Pass-Through Rate.
"Class T4-A1IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class A-1
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class A-1 REMIC Pass-Through Rate.
"Class T4-A2 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class A-2 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class A-2
Certificates and bears interest at the Class A-2 REMIC Pass-Through Rate.
"Class T4-A2IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class A-2
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class A-2 REMIC Pass-Through Rate.
"Class T4-B Interest": A regular interest in REMIC 4 that has a
principal balance equal to the Certificate Principal Balance of the Class B
Certificates and bears interest at the Class B REMIC Pass-Through Rate.
"Class T4-BIO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class B
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class B REMIC Pass-Through Rate.
"Class T4-M1 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-1 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-1
Certificates and bears interest at the Class M-1 REMIC Pass-Through Rate.
"Class T4-M1IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-1
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-1 REMIC Pass-Through Rate.
"Class T4-M2 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-2 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-2
Certificates and bears interest at the Class M-2 REMIC Pass-Through Rate.
"Class T4-M2IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-2
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-2 REMIC Pass-Through Rate.
"Class T4-M3 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-3 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-3
Certificates and bears interest at the Class M-3 REMIC Pass-Through Rate.
"Class T4-M3IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-3
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-3 REMIC Pass-Through Rate.
"Class T4-M4 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-4 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-4
Certificates and bears interest at the Class M-4 REMIC Pass-Through Rate.
"Class T4-M4IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-4
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-4 REMIC Pass-Through Rate.
"Class T4-M5 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-5 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-5
Certificates and bears interest at the Class M-5 REMIC Pass-Through Rate.
"Class T4-M5IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-5
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-5 REMIC Pass-Through Rate.
"Class T4-M6 Interest": A regular interest in REMIC 4, beneficial
ownership of which is represented by the Class M-6 Certificates that has a
principal balance equal to the Certificate Principal Balance of the Class M-6
Certificates and bears interest at the Class M-6 REMIC Pass-Through Rate.
"Class T4-M6IO Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Certificate Principal Balance of the Class M-6
Certificates and bears interest at a rate equal to the excess, if any, of (i)
the Pool Cap over (ii) the Class M-6 REMIC Pass-Through Rate.
"Class T4-4 Interest": A regular interest in REMIC 4 that has a
principal balance equal to the Class TA-4 Principal Amount and bears interest at
the INV Adjusted Weighted Average Net Mortgage Rate.
"Class T4-11 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the sum of (x) the Class T1-1 Principal Amount and (y)
the Remaining Marker Amounts and is entitled to all interest distributions on
the Class T3-11 Interest.
"Class T4-12 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class T1-2 Principal Amount and is entitled to all
interest distributions on the Class T3-12 Interest.
"Class T4-13 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class T1-3 Principal Amount and is entitled to all
interest distributions on the Class T3-13 Interest.
"Class T4-101 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class TA-101 Principal Amount and bears interest
at a rate equal to the excess, if any, of (a) the Group 1 Cap over (b) the Class
A-1 REMIC Pass-Through Rate.
"Class T4-1010 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class TA-101 Principal Amount and bears interest
at the excess, if any, of (a) the INV Adjusted Group 1 Weighted Average Net
Mortgage Rate over (b) the Group 1 Cap.
"Class T4-102 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class TA-102 Principal Amount and bears interest
at a rate equal to the excess, if any, of (a) the Group 2 Cap over (b) the Class
A-2 REMIC Pass-Through Rate.
"Class T4-1020 Interest": A regular interest in REMIC 4 that has a
notional balance equal to the Class TA-102 Principal Amount and bears interest
at the excess, if any, of (a) the Weighted Average Net Mortgage Rate of the
Group 2 Mortgage Loans over (b) the Group 2 Cap.
"Closing Date": September 26, 2002.
"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 Master Servicer pursuant to Section 3.04, which shall be entitled
"Collection Account, Option One Mortgage Corporation, as Master Servicer for the
Trust under the Pooling and Servicing Agreement dated as of September 1, 2002
among Asset Backed Funding Corporation, as Depositor, Option One Mortgage
Corporation, as Master Servicer, and Xxxxx Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of ABFC 2002-OPT1
Trust, ABFC Asset-Backed Certificates, Series 2002-OPT1," 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.
"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.
"Corporate Trust Office": The principal corporate trust office of
the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at (i) for certificate transfer
purposes, Xxxxx Xxxxx Xxxxxx, Xxxxx xxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx,
00000-0000, Attention: Client Manager-ABFC, Series 2002-OPT1 and (ii) for all
other purposes, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Client Manager-ABFC, Series 2002-OPT1 or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders, the
Depositor and the Master Servicer.
"Corresponding Classes": With respect to REMIC 3 and REMIC 4, the
following Classes shall be Corresponding Classes:
CORRESPONDING REMIC 3 CLASSES CORRESPONDING REMIC 4 CLASSES
----------------------------- -----------------------------
T3-A1 and T3-101, in the aggregate T4-A1, T4-101 and T4-A1IO, in the aggregate
T3-A2 and T3-102, in the aggregate T4-A2, T4-102 and T4-A2IO, in the aggregate
T3-1010 T4-1010
T3-1020 T4-1020
T3-AIO Class AIO Certificates
T3-INV Class AIO-INV Certificates
T3-M1 T4-M1 and T4-M1IO, in the aggregate
T3-M2 T4-M2 and T4-M2IO, in the aggregate
T3-M3 T4-M3 and T4-M3IO, in the aggregate
T3-M4 T4-M4 and T4-M4IO, in the aggregate
T3-M5 T4-M5 and T4-M5IO, in the aggregate
T3-M6 T4-M6 and T4-M6IO, in the aggregate
T3-B T4-B and T4-BIO, in the aggregate
T3-4 T4-4
"Credit Risk Manager": The Murrayhill Company, a Colorado
corporation.
"Credit Risk Manager Fee": The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate": With respect to any Distribution
Date, 0.0175% per annum.
"Credit Risk Management Agreement": The Credit Risk Management
Agreement between the Master Servicer and the Credit Risk Manager dated
September 26, 2002.
"Cut-off Date": September 1, 2002.
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date (or as of the applicable date
of substitution with respect to an Eligible Substitute Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Delinquent": Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
"Depositor": Asset Backed Funding Corporation, a Delaware
corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. The Depository
shall initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
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 Master
Servicer under this Agreement) shall not be considered to Directly Operate an
REO Property solely because the Trustee (or the Master Servicer under this
Agreement) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee
based upon an Opinion of Counsel provided by nationally recognized counsel to
the Trustee that the holding of an ownership interest in the Class R Certificate
by such Person may cause the Trust Fund or any Person having an ownership
interest in any Class of Certificates (other than such Person) to incur
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in the Class R Certificate
to such Person. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof if all of its
activities are subject to tax and a majority of its board of directors is not
selected by a governmental unit. The term "United States," "state" and
"international organization" shall have the meanings set forth in Section 7701
of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, Xxxxx Fargo Bank Minnesota, National Association, as
Trustee, in trust for the registered Holders of ABFC 2002-OPT1 Trust, ABFC
Asset-Backed Certificates, Series 2002-OPT1" 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 October 2002.
"Distribution Date Statement": As defined in Section 4.06(a) hereof.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the day of the calendar month in which such Distribution Date occurs on
which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.
"Eligible Account": Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A-1+" by S&P, "P-1" by Xxxxx'x and "F-1" by Fitch (or comparable ratings
if S&P, Xxxxx'x and Fitch are not the Rating Agencies) by each of the Rating
Agencies at the time any amounts are held on deposit therein, (ii) an account or
accounts the deposits in which are fully insured by the FDIC, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
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) have the same Due Date as the Defective Mortgage Loan; (iv) if an
Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Interest Rate not less
than the Maximum Mortgage Interest Rate for the Defective Mortgage Loan, (v) if
an Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Interest Rate not less
than the Minimum Mortgage Interest Rate of 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, an
Eligible Substitute Mortgage Loan must have all Adjustment Dates occurring
during the same Interest Accrual Period during which Adjustment Dates occur with
respect to the substituted Mortgage Loan, (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
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
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 underwritten or
reunderwritten in accordance with the same underwriting criteria and guidelines
as the Defective Mortgage Loan and (xiv) conform to each representation and
warranty set forth in Section 3.01 of the Mortgage Loan Purchase Agreement
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 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 (xiv) hereof must be satisfied as to each Eligible Substitute Mortgage
Loan or in the aggregate, as the case may be. Any Defective Mortgage Loan that
is a Group 1 Mortgage Loan or Group 2 Mortgage Loan must be replaced by an
Eligible Substitute Mortgage Loan that will be a Group 1 or Group 2 Mortgage
Loan, as applicable.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class B, Class CE, Class
P and Class R 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, (ii) the
Servicing Fee Rate and (iii) the Credit Risk Manager 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.
"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
(i) purchased by the Seller pursuant to or as contemplated by Section 2.03, (ii)
purchased by the Master Servicer pursuant to Section 3.16 or (iii) purchased by
the Majority Class CE Certificateholders or the Master Servicer pursuant to
Section 10.01), a determination made by the Master Servicer that all Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and other payments or
recoveries which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered. The
Master Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
"Fitch": Fitch Ratings and its successors, and if such company shall
for any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Fixed-Rate Mortgage Loan": A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Grantor Trust": That portion of the Trust exclusive of REMIC Q,
REMIC A, REMIC B, REMIC 1, REMIC 2, REMIC 3 and REMIC 4 which holds (a) the
REMIC 4 Regular Interests, (b) any Prepayment Charges received in respect of the
Mortgage Loans, any Servicer Prepayment Charge Payment Amounts and the right of
the Class P Certificateholders to receive such Prepayment Charges and Servicer
Prepayment Charge Payment Amounts, (c) the right of the Offered Certificates
(other than the Class AIO and Class AIO-INV Certificates) to receive Cap
Carryover Amounts, (d) the Swap Agreement and the rights and obligations of the
Class A-2 Certificates with respect thereto and (e) the Yield Maintenance
Agreement, the Reserve Account and the beneficial interest of the Class CE
Certificates with respect thereto, subject to the obligation to pay Cap
Carryover Amounts.
"Gross Margin": With respect to each Adjustable-Rate Mortgage Loan,
the fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"Group 1 Cap": As of any Distribution Date and the Class A-1
Certificates, a per annum rate, adjusted by multiplying such rate by a fraction
equal to 30 over the actual number of days in the related Interest Accrual
Period, equal to the Weighted Average Net Mortgage Interest Rate for the Group 1
Mortgage Loans less the sum of (i) the product of (a) the Pass-Through Rate of
the Class AIO Certificates for such Distribution Date and (b) a fraction,
expressed as a percentage, the numerator of which is the Notional Amount of the
Class AIO Certificates immediately prior to such Distribution Date and the
denominator of which is the Pool Balance as of the first day of the related
Collection Period and (ii) the Pass-Through Rate of the Class AIO-INV
Certificates.
"Group 1 Class AIO Accrued Certificate Interest": For the Class AIO
Certificates and each Distribution Date, an amount equal to (i) the Accrued
Certificate Interest for the Class AIO Certificates for such Distribution Date
multiplied by (ii) a fraction, the numerator of which is Accrued Certificate
Interest for the Class A-1 Certificates and the denominator of which is the sum
of the Accrued Certificate Interest for the Class A-1 and Class A-2
Certificates.
"Group 1 Class AIO Interest Carry Forward Amount": For the Class AIO
Certificates and any Distribution Date, the product of (i) the Interest Carry
Forward Amount for the Class AIO Certificates for such Distribution Date
multiplied by (ii) a fraction, the numerator of which is the Accrued Certificate
Interest for the Class A-1 Certificates and the denominator of which is the sum
of the Accrued Certificate Interest for the Class A-1 and Class A-2
Certificates.
"Group 1 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 1 Mortgage Loans
received by the Master Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Master Servicer on such Distribution Date with respect to such Mortgage
Loans and (iii) the portion of any payment in connection with any Principal
Prepayment, substitution, Purchase Price, Termination Price or Net Liquidation
Proceeds relating to interest with respect to such Mortgage Loans received
during the related Prepayment Period.
"Group 1 Maximum Rate Cap": With respect to any Distribution Date
and for the Class A-1 Certificates, a per annum rate, adjusted by multiplying
such rate by a fraction equal to 30 over the actual number of days in the
related Interest Accrual Period, equal to the average of the Net Maximum
Mortgage Interest Rates for the Adjustable-Rate Mortgage Loans which are Group 1
Mortgage Loans and the Net Mortgage Interest Rates for the Fixed-Rate Mortgage
Loans which are Group 1 Mortgage Loans, weighted on the basis of the Principal
Balances of the Group 1 Mortgage Loans as of the first day of the related
Collection Period, less the sum of (i) the product of (a) the Pass-Through Rate
of the Class AIO Certificates for such Distribution Date and (b) a fraction,
expressed as a percentage, the numerator of which is the Notional Amount of the
Class AIO Certificates immediately prior to such Distribution Date and the
denominator of which is the Pool Balance as of the first day of the related
Collection Period and (ii) the Pass-Through Rate of the Class AIO-INV
Certificates for such Distribution Date.
"Group 1 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-1
hereto. Each Group 1 Mortgage Loan had, as of the Cut-off Date, a Principal
Balance that conforms to Xxxxxx Xxx and Xxxxxxx Mac guidelines.
"Group 1 Principal Percentage": With respect to any Distribution
Date and the Class A-1 Certificates, the percentage equivalent to a fraction,
the numerator of which is the amount of principal collections (including any
principal advanced by the Master Servicer) allocable to the Group 1 Mortgage
Loans for the related Collection Period or Prepayment Period, as applicable, and
the denominator of which is the amount of principal collections (including any
principal advanced by the Master Servicer) allocable to the Mortgage Loans for
the related Collection Period or Prepayment Period, as applicable.
"Group 2 Cap": As of any Distribution Date and for the Class A-2
Certificates, a per annum rate equal to (i) the Weighted Average Net Mortgage
Interest Rate for the Group 2 Mortgage Loans less (ii) the product of (a) the
Pass-Through Rate of the Class AIO Certificates for such Distribution Date and
(b) a fraction, expressed as a percentage, the numerator of which is the
Notional Amount of the Class AIO Certificates immediately prior to such
Distribution Date and the denominator of which is the Pool Balance as of the
first day of the related Collection Period.
"Group 2 Class AIO Accrued Certificate Interest": For the Class AIO
Certificates and each Distribution Date, an amount equal to (i) the Accrued
Certificate Interest for the Class AIO Certificates for such Distribution Date
multiplied by (ii) a fraction, the numerator of which is the Accrued Certificate
Interest for the Class A-2 Certificates and the denominator of which is the sum
of the Accrued Certificate Interest for the Class A-1 and Class A-2
Certificates.
"Group 2 Class AIO Interest Carry Forward Amount": For the Class AIO
Certificates and any Distribution Date, the product of (i) the Interest Carry
Forward Amount for the Class AIO Certificates for such Distribution Date
multiplied by (ii) a fraction, the numerator of which is the Accrued Certificate
Interest for the Class A-2 Certificates and the denominator of which is the sum
of the Accrued Certificate Interest for the Class A-1 and Class A-2
Certificates.
"Group 2 Interest Remittance Amount": As of any Distribution Date,
the sum, without duplication, of (i) all interest due and collected or advanced
with respect to the related Collection Period on the Group 2 Mortgage Loans
received by the Master Servicer on or prior to the Determination Date for such
Distribution Date (less the Servicing Fee, amounts available for reimbursement
of Advances and Servicing Advances pursuant to Section 3.05 and expenses
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Master Servicer on such Distribution Date with respect to such Mortgage
Loans and (iii) the portion of any payment in connection with any Principal
Prepayment, substitution, Purchase Price, Termination Price or Net Liquidation
Proceeds relating to interest with respect to such Mortgage Loans received
during the related Prepayment Period.
"Group 2 Maximum Rate Cap": With respect to any Distribution Date
after the Distribution Date in September 2004 and for the Class A-2
Certificates, a per annum rate equal to (i) the average of the Net Maximum
Mortgage Interest Rates for the Adjustable-Rate Mortgage Loans which are Group 2
Mortgage Loans and the Net Mortgage Interest Rates for the Fixed-Rate Mortgage
Loans which are Group 2 Mortgage Loans, weighted on the basis of the Principal
Balances of the Group 2 Mortgage Loans as of the first day of the related
Collection Period, less (ii) the product of (a) the Pass-Through Rate of the
Class AIO Certificates for such Distribution Date and (b) a fraction, expressed
as a percentage, the numerator of which is the Notional Amount of the Class AIO
Certificates immediately prior to such Distribution Date and the denominator of
which is the Pool Balance as of the first day of the related Collection Period.
"Group 2 Mortgage Loan": Each Mortgage Loan listed on Exhibit D-2
hereto. Each Group 2 Mortgage Loan had, as of the Cut-off Date, a Principal
Balance that does not conform to Xxxxxx Mae and Xxxxxxx Mac guidelines.
"Group 2 Principal Percentage": With respect to any Distribution
Date and the Class A-2 Certificates, the percentage equivalent to a fraction,
the numerator of which is the amount of principal collections (including any
principal advanced by the Master Servicer) allocable to the Group 2 Mortgage
Loans for the related Collection Period or Prepayment Period, as applicable, and
the denominator of which is the amount of principal collections (including any
principal advanced by the Master Servicer) allocable to the Mortgage Loans for
the related Collection Period or Prepayment Period, as applicable.
"Independent": When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Master 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
Master Servicer or any Affiliate thereof, and (iii) is not connected with the
Depositor or the Master 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 Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to the
Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund
were a real estate investment trust (except that the ownership tests set forth
in that section shall be considered to be met by any Person that owns, directly
or indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Master 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 AIO, Class AIO-INV, Class CE, Class P
or Class R Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.
"Initial Notional Amount": With respect to a Class AIO or Class
AIO-INV Certificate, the amount designated "Initial Notional Amount" on the face
thereof.
"Initial Overcollateralization Amount": $3,192,849.25.
"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 Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and
(i) the Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates and the Class T3-A1, Class T3-101, Class T3-A2,
Class T3-M1, Class T3-M2, Class T3-M3, Class T3-M4, Class T3-M5, Class T3-M6,
Class T4-A1, Class T4-101, Class T4-A2, Class T4-M1, Class T4-M2, Class T4-M3,
Class T4-M4, Class T4-M5 and Class T4-M6 Interests, the period from the
preceding Distribution Date to the day prior to the current Distribution Date
(or, in the case of the first Distribution Date, the period from the Closing
Date through October 24, 2002), and (ii) the Class AIO, Class AIO-INV and Class
B Certificates and the REMIC Regular Interests (other than the Class T3-A1,
Class T3-101, Class T3-A2, Class T3-M1, Class T3-M2, Class T3-M3, Class T3-M4,
Class T3-M5, Class T3-M6, Class T4-A1, Class T4-101, Class T4-A2, Class T4-M1,
Class T4-M2, Class T4-M3, Class T4-M4, Class T4-M5 and Class T4-M6 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 CE, Class P and Class R Certificates) and any Distribution
Date, the sum of (a) the excess, if any, of the Accrued Certificate Interest and
any Interest Carry Forward Amount for the prior Distribution Date, over the
amount in respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Pass-Through
Rate (x) with respect to the Offered Certificates (other than the Class A-2,
Class AIO, Class AIO-INV and Class B Certificates), for 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 A-2, Class AIO, Class AIO-INV and Class B
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, in each case with respect to such
Distribution Date, without regard to Relief Act Interest Shortfalls.
"Interest Remittance Amount": As of any Determination Date, the sum
of the Group 1 Interest Remittance Amount and the Group 2 Interest Remittance
Amount.
"INV Adjusted Group 1 Weighted Average Net Mortgage Rate": The
Weighted Average Net Mortgage Rate of the Group 1 Mortgage Loans minus the Class
AIO-INV Pass-Through Rate, expressed as an annual rate and calculated on the
basis of twelve months consisting of 30 days each and a 360-day year.
"INV Adjusted Weighted Average Net Mortgage Rate": The weighted
average (based on Principal Balances 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 Class TQ-1 Interest and the Class TQ-2 Interest, expressed as an
annual rate and calculated on the basis of twelve months consisting of 30 days
each and a 360-day year.
"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, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent on a contractual basis for such Collection Period and not
previously recovered.
"LIBOR Business Day": Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.
"LIBOR Determination Date": With respect to the Offered Certificates
(other than the Class AIO, Class AIO-INV and Class B Certificates and the Class
A-2 Certificates prior to the October 2004 Distribution Date), (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 Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Prepayment Period, that all Liquidation Proceeds, Condemnation Proceeds
and Insurance Proceeds which it expects to recover with respect to the
liquidation of the Mortgage Loan or disposition of the related REO Property have
been recovered.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation 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 as is agreed to by the Master Servicer and the
Trustee listing (i) the sale price of the related Mortgaged Property or amount
of the REO Disposition, (ii) the amount of any Realized Loss (or gain) with
respect to such Liquidated Mortgage Loan, (iii) the expenses relating to the
liquidation of such Liquidated Mortgage Loan and (iv) such other information as
is agreed to by the Master Servicer and the Trustee.
"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 and the denominator of which is the Value of the
related Mortgaged Property.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class CE Certificateholders": The Holders of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.
"Master Servicer": Option One Mortgage Corporation, a California
corporation, or any successor servicer appointed as herein provided, in its
capacity as Master Servicer hereunder.
"Maximum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Interest Rate thereunder.
"Minimum Mortgage Interest Rate": With respect to each
Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Interest Rate thereunder.
"Monthly Excess Cashflow Amount": The sum of the Monthly Excess
Interest Amount, the Overcollateralization Release Amount and (without
duplication) any portion of the Principal Distribution Amount remaining after
principal distributions on the Offered Certificates.
"Monthly Excess Interest Amount": With respect to each Distribution
Date, the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (xii) under Section 4.01.
"Monthly Form 8-K": As defined in Section 3.32(a) hereof.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Master 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 lien on, or first 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 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 applicable 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 applicable Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date, to
equal the sum, rounded as provided in the Mortgage Note, of the Index,
determined as set forth in the related Mortgage Note, plus the related Gross
Margin subject to the limitations set forth in the related Mortgage Note. With
respect to each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 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 Schedules.
"Mortgage Loan Purchase Agreement": The agreement between the Seller
and the Depositor, dated as of September 1, 2002, 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 lists of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed-Rate Mortgage Loans and the
Adjustable-Rate Mortgage Loans, attached hereto as Exhibits D-1 and D-2. The
Mortgage Loan Schedules shall set forth the following information with respect
to each Mortgage Loan:
(1) the Mortgage Loan identifying number;
(2) the state and zip code of the Mortgaged Property;
(3) the type of Residential Dwelling constituting the Mortgaged Property;
(4) the occupancy status of the Mortgaged Property at origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the Cut-off Date;
(12) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
Date;
(13) the current principal and interest payment of the Mortgage Loan as of
the Cut-off Date;
(14) the contractual interest paid to date of the Mortgage Loan;
(15) the Loan-to-Value Ratio at origination and as of the Cut-off Date;
(16) a code indicating the loan performance status of the Mortgage Loan as
of the Cut-off Date;
(17) a code indicating the Index that is associated with such Mortgage
Loan;
(18) the Gross Margin;
(19) the Periodic Rate Cap;
(20) the Minimum Mortgage Interest Rate;
(21) the Maximum Mortgage Interest Rate;
(22) a code indicating whether the Mortgage Loan has a Prepayment Charge
and the type of Prepayment Charge and the term;
(23) the first Adjustment Date immediately following the Cut-off Date;
(24) the rate adjustment frequency;
(25) the payment adjustment frequency; and
(26) the purpose of the Mortgage Loan.
The Mortgage Loan Schedules shall set forth the following
information, as of the Cut-off Date, with respect to the Mortgage Loans in the
aggregate, for the Fixed-Rate Mortgage Loans and for the Adjustable-Rate
Mortgage Loans: (1) the number of Mortgage Loans; (2) the current Principal
Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage
Loans. The Mortgage Loan Schedules shall be amended from time to time in
accordance with the provisions of this Agreement. With respect to any Eligible
Substitute Mortgage Loan, Cut-off Date shall refer to the applicable date of
substitution.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibits
D-1 and D-2 from time to time, and any REO Properties acquired in respect
thereof.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of unreimbursed Advances,
unreimbursed Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.
"Net Maximum Mortgage Interest Rate": With respect to any
Adjustable-Rate Mortgage Loan, the applicable Maximum Mortgage Interest Rate
minus the Expense Fee Rate.
"Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount": With respect to (a) the Class AIO Certificates
and any Distribution Date (through the March 2005 Distribution Date), the lesser
of (i) $63,837,000 and (ii) the aggregate Principal Balance of the Mortgage
Loans as of the first day of the related Collection Period and (b) the Class
AIO-INV Certificates and any Distribution Date, the aggregate Principal Balance
of the Group 1 Mortgage Loans as of the first day of the related Collection
Period.
"Offered Certificates": The Class A-1, Class A-2, Class AIO, Class
AIO-INV, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and
Class B Certificates.
"Offered P&I Certificates": The Class X-0, Xxxxx X-0, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class B 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 Master Servicer, the Seller
or the Depositor, as applicable.
"One-Month 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, One-Month LIBOR for the related Interest Accrual Period will
be established by the Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the 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 (other than the Class B
Certificates); and
(iii) If no such quotations can be obtained, One-Month LIBOR for the
related Interest Accrual Period shall be One-Month LIBOR for the prior
Distribution Date.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer
except that any opinion of counsel relating to (a) the qualification of any
REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion
of Independent counsel.
"Optional Termination Date": The first Distribution Date on which
the Majority Class CE Certificateholders or Master Servicer may opt to terminate
the Mortgage Pool pursuant to Section 10.01.
"Original Notional Amount": With respect to the Class AIO and Class
AIO-INV Certificates, the Notional Amount on the Closing Date, as set forth
opposite each 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 AIO, Class AIO-INV, Class CE, Class P and Class R
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 related
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).
"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 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.
"P&I Regular Interest": Any of the Class T4-A1 Interest, Class T4-A2
Interest, Class T4-M1 Interest, Class T4-M2 Interest, Class T4-M3 Interest,
Class T4-M4 Interest, Class T4-M5 Interest, Class T4-M5 Interest, Class T4-M6
Interest or Class T4-B Interest.
"Pass-Through Rate": Any of the Class A-1 Pass-Through Rate, the
Class A-2 Pass-Through Rate, the Class AIO Pass-Through Rate, the Class AIO-INV
Pass-Through Rate, the Class M-1 Pass-Through Rate, the Class M-2 Pass-Through
Rate, Class M-3 Pass-Through Rate, the Class M-4 Pass-Through Rate, the Class
M-5 Pass-Through Rate, the Class M-6 Pass-Through Rate and the Class B
Pass-Through Rate; and in the case of any P&I Regular Interest, the Pass-Through
Rate set forth in the definition thereof.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class AIO, Class AIO-INV, Class CE, Class P or Class R Certificate), a fraction,
expressed as a percentage, the numerator of which is the Initial Certificate
Principal Balance, as the case may be, represented by such Certificate and the
denominator of which is the Original Class Certificate Principal Balance of the
related Class. With respect to a Class AIO or Class AIO-INV Certificate, the
undivided percentage interest obtained by dividing the Initial Notional Amount
evidenced by such Certificate by the Original Notional Amount of such Class.
With respect to a Class CE or Class P Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, that the sum of all such percentages for each
such Class totals 100%. With respect to the Class R Certificate, 100%.
"Periodic Rate Cap": With respect to each Adjustable-Rate Mortgage
Loan and any Adjustment Date therefor, the fixed percentage set forth in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase or decrease (without regard to
the Maximum Mortgage Interest Rate or the Minimum Mortgage Interest Rate) on
such Adjustment Date from the Mortgage Interest Rate in effect immediately prior
to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Depositor, the Master Servicer,
the 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 and Xxxxx'x 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 and Fitch and A2 or higher by Xxxxx'x, provided,
however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and must (A)
be valued daily at current market prices plus accrued interest or (B)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by the 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 Class R Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Class R Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Pool Cap": As of any Distribution Date and for the Class M and
Class B Certificates, a per annum rate, adjusted (other than in the case of the
Class B Certificates) by multiplying such rate by a fraction equal to 30 over
the actual number of days in the related Interest Accrual Period, equal to the
Weighted Average Net Mortgage Interest Rates for the Mortgage Loans less the sum
of (i) the product of (a) the Pass-Through Rate of the Class AIO Certificates
for such Distribution Date and (b) a fraction, expressed as a percentage, the
numerator of which is the Notional Amount of the Class AIO Certificates
immediately prior to such Distribution Date and the denominator of which is the
Pool Balance as of the first day of the related Collection Period and (ii) the
product of (a) the Pass-Through Rate of the Class AIO-INV Certificates for such
Distribution Date and (b) a fraction, expressed as a percentage, the numerator
of which is the Notional Amount of the Class AIO-INV Certificates immediately
prior to such Distribution Date and the denominator of which is the Pool Balance
as of the first day of the related Collection Period.
"Pool Maximum Rate Cap": With respect to any Distribution Date and
for the Class M Certificates, a per annum rate, adjusted by multiplying such
rate by a fraction equal to 30 over the actual number of days in the related
Interest Accrual Period, equal to the average of the Net Maximum Mortgage
Interest Rates for the Adjustable-Rate Mortgage Loans and the Net Mortgage
Interest Rates for the Fixed-Rate Mortgage Loans, weighted on the basis of the
Principal Balances of the Mortgage Loans as of the first day of the related
Collection Period, less the sum of (i) the product of (a) the Pass-Through Rate
of the Class AIO Certificates for such Distribution Date and (b) a fraction,
expressed as a percentage, the numerator of which is the Notional Amount of the
Class AIO Certificates immediately prior to such Distribution Date and the
denominator of which is the Pool Balance as of the first day of the related
Collection Period and (ii) the product of (a) the Pass-Through Rate of the Class
AIO-INV Certificates for such Distribution Date and (b) a fraction, expressed as
a percentage, the numerator of which is the Notional Amount of the Class AIO-INV
Certificates immediately prior to such Distribution Date and the denominator of
which is the Pool Balance as of the first day of the related Collection Period.
"Prepayment Charge": With respect to any Prepayment Period, any
prepayment premium, penalty or charge collected by the Master Servicer from a
Mortgagor in connection with any voluntary Principal Prepayment in full pursuant
to the terms of the related Mortgage Note as from time to time held as a part of
the Trust Fund, the Prepayment Charges so held being identified in the Mortgage
Loan Schedules (other than any Servicer Prepayment Charge Payment Amount).
"Prepayment Charge Schedule": As of any date, the list of Prepayment
Charges included in the Trust Fund on such date, attached hereto as Schedule I
(including the prepayment charge summary attached thereto) as supplemented by
each schedule of Eligible Substitute Mortgage Loans which by their terms have
related Prepayment Charges. The Prepayment Charge Schedule shall set forth the
following information with respect to each Prepayment Charge:
(a) the Mortgage Loan identifying number;
(b) a code indicating the type of Prepayment Charge;
(c) the date on which the first Monthly Payment was due on the
related Mortgage Loan;
(d) the term of the Prepayment Charge;
(e) the original Principal Balance of the related Mortgage Loan; and
(f) the Cut-off Date Principal Balance of the related Mortgage Loan.
The Prepayment Charge Schedule shall be amended from time to time by the
Depositor in accordance with the provisions of this Agreement.
"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 Master
Servicer to reduce the outstanding principal balance of such loan on a date
preceding the related Due Date, an amount equal to interest at the applicable
Mortgage Interest Rate (net of the Servicing Fee Rate) on the amount of such
Principal Prepayment for the number of days commencing on the date on which the
prepayment is applied and ending on the last day of the related Prepayment
Period.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Principal Balance": As to any Mortgage Loan and any day, other than
a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus
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 Master Servicer on or prior to the related Determination Date,
and any Advances with respect thereto, (ii) all full and partial Principal
Prepayments received by the Master Servicer during the related Prepayment
Period, (iii) the Net Liquidation Proceeds allocable to principal actually
collected by the Master 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 received on or prior to the previous
Determination Date and not yet distributed and (vi) on the Distribution Date on
which the Trust is to be terminated in accordance with Section 10.01 hereof,
that portion of the Termination Price in respect of principal.
"Private Certificates": Any of the Class B, Class CE, Class P and
Class R 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 Master Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the Master Servicer's servicing procedures, subject to the terms
and conditions of the related Mortgage Note and Mortgage.
"Prospectus Supplement": That certain Prospectus Supplement dated
September 24, 2002 relating to the public offering of the Offered Certificates,
other than the Class B Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in the
case of (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 Master 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 Master 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 Master 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, Xxxxx'x and S&P, or their
respective successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount": Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized Loss
Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the Class
M-6 Realized Loss Amortization Amount and the Class B Realized Loss Amortization
Amount.
"Record Date": With respect to all of the Certificates (other than
the Class AIO, Class AIO-INV and Private Certificates), the Business Day
immediately preceding such Distribution Date; provided, however, that if any
such Certificate becomes a Definitive Certificate, the Record Date for such
Certificate shall be the last Business Day of the month immediately preceding
the month in which the related Distribution Date occurs. With respect to the
Class AIO, Class AIO-INV and Private Certificates, the last Business Day of the
month immediately preceding the month in which the related Distribution Date
occurs.
"Reference Banks": Those banks (i) with an established place of
business in London, England, (ii) not controlling, under the control of or under
common control with the Depositor or the Trustee, (iii) whose quotations appear
on the Telerate Page 3750 on the relevant LIBOR Determination Date and (iv)
which have been designated as such by the Trustee; provided, however, that if
fewer than two of such banks provide a One-Month LIBOR rate, then any leading
banks selected by the Trustee which are engaged in transactions in United States
dollar deposits in the international Eurocurrency market.
"Regular Certificate": Any of the Offered Certificates and the Class
CE Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act 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.
"Remaining Initial Overcollateralization Amount": As of any
Distribution Date, an amount equal to (a) the Initial Overcollateralization
Amount minus (b) the sum of (i) any Overcollateralization Release Amounts
distributed and (ii) Realized Losses allocated to the Class T1-4 Interest.
"Remaining Marker Amounts": The sum of the principal amounts of the
Class TA-101 and Class TA-102 Interests.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC 1 Regular Interests": The Class T1-AIO Interest, Class T1-INV
Interest, Class T1-1 Interest, Class T1-101 Interest, Class T1-102 Interest,
Class T1-2 Interest, Class T1-3 Interest and Class T1-4 Interest.
"REMIC 2 Pass-Through Rate": With respect to any Distribution Date,
a rate obtained by dividing (A) the product of (i) 2 times (ii) the Adjusted
Weighted Average Net Mortgage Rate times (iii) the Class T1-2 Principal Amount
by (B) the sum of (x) the Class T1-2 Principal Amount and (y) the Class T1-3
Principal Amount, such principal balances being determined before any reductions
of principal balance or allocation of Realized Losses made on such Distribution
Date.
"REMIC 2 Regular Interests": The Class T2-AIO Interest, Class T2-INV
Interest, Class T2-1 Interest, Class T2-101 Interest, Class T2-102 Interest,
Class T2-2 Interest, Class T2-3 Interest, Class T2-4 Interest, Class T2-11
Interest, Class T2-12 Interest and Class T2-13 Interest.
"REMIC 3 Regular Interests": The Class T3-AIO Interest, Class T3-INV
Interest, Class T3-A1 Interest, Class T3-101 Interest, Class T3-102 Interest,
Class T3-1010 Interest, Class T3-1020 Interest, Class T3-A2 Interest, Class
T3-M1 Interest, Class T3-M2 Interest, Class T3-M3 Interest, Class T3-M4
Interest, Class T3-M5 Interest, Class T3-M6 Interest, Class T3-B Interest, Class
T3-4 Interest, Class T3-11 Interest, Class T3-12 Interest and Class T3-13
Interest.
"REMIC 4 Components": The Class T4-4, Class T4-11, Class T4-12,
Class T4-13, Class T4-101, Class T4-102, Class T4-1010, Class T4-1020, Class
T4-A1IO, Class T4-A2IO, Class T4-M1IO, Class T4-M2IO, Class T4-M3IO, Class
T4-M4IO, Class T4-M5IO, Class T4-M6IO and Class T4-BIO Interests. Each of the
REMIC 4 Components represents a regular interest in REMIC 4.
"REMIC 4 Regular Interests": The Class T4-A1 Interest, Class T4-A2
Interest, Class T4-M1 Interest, Class T4-M2 Interest, Class T4-M3 Interest,
Class T4-M4 Interest, Class T4-M5 Interest, Class T4-M6 Interest and Class T4-B
Interest and the REMIC 4 Components.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": As defined in the Preliminary Statement.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.07, containing the information
attached hereto as Exhibit M.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust.
"REO Imputed Interest": As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage Interest Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
for such Collection Period on the unpaid Principal Balance of the Mortgage Loan
as of the date of acquisition.
"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 Master 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 Master Servicer
on behalf of the Trust 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(g) which shall be entitled "Reserve Account,
Xxxxx Fargo Bank Minnesota, National Association, as Trustee, in trust for
registered Holders of ABFC 2002-OPT1 Trust, ABFC Asset-Backed Certificates,
Series 2002-OPT1" 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 detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a Xxxxxx Mae eligible condominium project, (iv) a
manufactured home, or (v) a detached one-family dwelling in a planned unit
development, none of which is a co-operative or mobile home.
"Residual Interest": The sole Class of "residual interests" in each
REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, 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.
"Seller": Bank of America, N.A., or its successor in interest, in
its capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates": The Class A-1, Class A-2, Class AIO and Class
AIO-INV Certificates.
"Senior Enhancement Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balances of the Subordinated Certificates and (ii) the
Overcollateralization Amount, in each case after taking into account the
distribution of the Principal Distribution Amount on such Distribution Date by
(y) the Pool Balance as of the last day of the related Collection Period.
"Senior Principal Distribution Amount": For any Distribution Date
(i) before the Stepdown Date or as to which a Trigger Event is in effect, the
lesser of (x) the Principal Distribution Amount and (y) the sum of the
Certificate Principal Balances of the Class A Certificates immediately prior to
such Distribution Date and (ii) 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) 62.00% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of (i) 0.50% and (ii) the Cut-off Date Aggregate Principal Balance.
"Senior Specified Enhancement Percentage": On any date of
determination thereof, 38.00%.
"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 Master Servicer, default is
reasonably foreseeable.
"Servicer Prepayment Charge Payment Amount": The amount payable by
the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 3.01, which amount shall be equal to the difference between the amount
of Prepayment Charge due by a Mortgagor before any waiver and the actual amount
of the Prepayment Charge that was paid by the Mortgagor.
"Servicer Remittance Date": With respect to any Distribution Date,
one Business Day prior to such Distribution Date.
"Servicing Advances": All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Master Servicer (including
reasonable attorneys' fees and disbursements) in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of the Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under 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 Master Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Master Servicer to the Trustee and the Depositor on the Closing Date, as
such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"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 Master
Servicer because the Master Servicer is the subject of a proceeding under the
Bankruptcy Code and the making of such remittance is prohibited by Section 362
of the Bankruptcy Code.
"Stepdown Date": The earlier to occur of (i) the Distribution Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
is reduced to zero and (ii) the later to occur of (x) the Distribution Date in
October 2005 and (y) the 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 M-4, Class M-5, Class M-6, Class B, Class CE and Class R Certificates.
"Subsequent Overcollateralization Amount": As of any Distribution
Date, after the application of principal payments and Applied Realized Loss
Amounts, an amount equal to the excess, if any of (a) the Pool Balance over (b)
the sum of (i) the Certificate Principal Balance of each Class of Offered
Certificates and (ii) the Remaining Initial Overcollateralization Amount.
"Substitution Adjustment Amount": As defined in Section 2.03(d)
hereof.
"Swap Agreement": The transactions evidenced by the ISDA Master
Agreement, together with the Schedule and Confirmation and any related documents
thereto dated as of September 26, 2002, between Bank of America, N.A. and the
Auction Administrator. The Swap Agreement shall not be an asset of any REMIC
formed under this Agreement.
"Targeted Overcollateralization Amount": As of any Distribution
Date, (x) prior to the Stepdown Date, 0.50% of the Cut-off Date Aggregate
Principal Balance and (y) on and after the Stepdown Date, (i) if a Trigger Event
has not occurred, the greater of (A) 1.00% of the Pool Balance as of the last
day of the related Collection Period and (B) 0.50% of the Cut-off Date Aggregate
Principal Balance and (ii) if a Trigger Event has occurred, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax returns on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust for each of the seven REMICs created
pursuant to this Agreement under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
"Telerate Page 3750": The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace the Telerate Page
3750 page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Trigger Event": With respect to any Distribution Date, if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 45% 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 divided by the Cut-off Date Aggregate Principal Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
DISTRIBUTION DATE OCCURRING IN PERCENTAGE
------------------------------ ----------
October 2005 through September 2006 3.00%
October 2006 through September 2007 4.00%
October 2007 through September 2008 4.75%
October 2008 through September 2009 5.25%
October 2009 and thereafter 5.50%
"Trust": ABFC 2002-OPT1 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 seven 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 and the Reserve 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": Xxxxx Fargo Bank Minnesota, National Association, a
national banking association, 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, 0.008%
per annum.
"United States Person" or "U.S. Person": (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated as
a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
provide otherwise), (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 X-0, Xxxxx X-0, Class
M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates and as to any
Distribution Date, the excess of (x) the aggregate Applied Realized Loss Amounts
applied with respect to such Class for all prior Distribution Dates over (y) the
aggregate Realized Loss Amortization Amounts with respect to such Class for all
prior Distribution Dates.
"Value": With respect to any Mortgaged Property, the value thereof
as determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan or the sale price, if the appraisal is not available.
"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 (other than the Class AIO and Class
AIO-INV Certificates) shall be 96%, and shall be allocated among each such Class
according to the fraction, expressed as a percentage, the numerator of which is
the aggregate Certificate Principal Balance of all the Certificates of such
Class then outstanding and the denominator of which is the aggregate Certificate
Principal Balance of all the Offered Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any Certificate
registered in the name of the Master Servicer, the Depositor 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. 1%
of all the Voting Rights will be allocated to the Holders of each of the Class
AIO, Class AIO-INV, Class CE and Class P Certificates. The Class R Certificates
shall have no Voting Rights.
"Weighted Average Net Mortgage Rate": The weighted average (based on
Principal Balance as of the first day of the related Collection Period or, in
the case of the first Distribution Date, the Cut-Off Date) of the Net Mortgage
Interest Rates of the Mortgage Loans, the Group 1 Mortgage Loans or the Group 2
Mortgage Loans, as applicable, expressed for each such Mortgage Loan as an
annual rate and calculated on the basis of twelve months consisting of 30 days
each and a 360-day year.
"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 N. The Yield
Maintenance Agreement shall not be an asset of any REMIC formed under this
Agreement.
"Yield Maintenance Agreement Payment": Beginning on the first
Distribution Date and on each Distribution Date thereafter through the
Distribution Date in July 2004, the amount equal to the product of (a) the
number of basis points by which One-Month LIBOR exceeds 7.40% (up to a maximum
of 185 basis points) and (b) the product of the notional amount and multiplier
set forth on the schedule attached to the confirmation to the Yield Maintenance
Agreement for that Distribution Date, calculated on the basis of the actual
number of days in the related Interest Accrual Period and on a 360-day year.
"Yield Maintenance Agreement Provider": Swiss Re Financial Products
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 Schedules, including the related Cut-off
Date Principal Balance, all interest accruing thereon after the Cut-off Date and
all collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans; (iv) all other assets
included or to be included in the Trust Fund; (v) all proceeds of any of the
foregoing; and (vi) the rights of the Depositor under the Mortgage Loan Purchase
Agreement. Such assignment includes all interest and principal due to the
Depositor or the Master Servicer after the Cut-off Date with respect to the
Mortgage Loans.
In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with the Trustee, or its designated agent, 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 Xxxxx Fargo Bank Minnesota,
National Association, as Trustee under the Pooling and Servicing
Agreement, dated as of September 1, 2002, among Asset Backed Funding
Corporation, Option One Mortgage Corporation and Xxxxx Fargo Bank
Minnesota, National Association, ABFC Asset-Backed Certificates,
Series 2002-OPT1, 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 "Xxxxx Fargo Bank Minnesota, National Association, as Trustee
under the Pooling and Servicing Agreement, dated as of September 1,
2002, among Asset Backed Funding Corporation, Option One Mortgage
Corporation and Xxxxx Fargo Bank Minnesota, National Association,
ABFC Asset-Backed Certificates, Series 2002-OPT1, 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 lender's title insurance policy;
and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
The Trustee agrees to execute and deliver to the Depositor on or
prior to the Closing Date an acknowledgment of receipt of the original Mortgage
Note (with any exceptions noted), substantially in the form attached as Exhibit
F-3 hereto.
If any of the documents referred to 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 Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee no later than the
Closing Date, of a copy of each such document certified by the Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee, promptly upon receipt thereof of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original. The Depositor shall deliver or cause to be
delivered to the Trustee 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. If the Seller does not cure such defect or deliver such missing
document within such time period, the Seller shall either repurchase or
substitute for such Mortgage Loan in accordance with Section 2.03.
The Depositor shall cause the Assignments of Mortgage which were
delivered in blank to be completed. In the event that any Mortgage Note is
endorsed in blank as of the Closing Date, promptly following the Closing Date
the Depositor shall cause to be completed such endorsements "Pay to the order of
Xxxxx Fargo Bank Minnesota, National Association, as Trustee under the Pooling
and Servicing Agreement, dated as of September 1, 2002, among Asset Backed
Funding Corporation, Option One Mortgage Corporation and Xxxxx Fargo Bank
Minnesota, National Association, ABFC Asset-Backed Certificates, Series
2002-OPT1, without recourse."
The Depositor herewith delivers to the Trustee an executed copy 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 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
Schedules (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 Schedules that
corresponds to items (1), (2), (3), (6), (7), (8), (10) and (22) of the Mortgage
Loan Schedules accurately reflects information set forth in the Mortgage File.
It is herein acknowledged that, in conducting such review, the Trustee is under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
Prior to the first anniversary date of this Agreement the Trustee
shall deliver to the Depositor and the Master 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
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 Master Servicer.
In addition, upon the discovery by the Seller, the Depositor, the Trustee or the
Master 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 Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially adversely affects such Mortgage Loan or the interests of the
related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan, Prepayment Charge
or the interest therein of the Certificateholders, the Trustee shall promptly
notify the Seller and the Master Servicer of such defect, missing document or
breach and request that the Seller deliver such missing document or cure such
defect or breach within 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(d)); 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 notice from the Master 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(c). It is
understood and agreed that the obligation of the Seller to cure or to repurchase
(or to substitute for) any Mortgage Loan as to which a document is missing, a
material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy against the
Seller respecting such omission, defect or breach available to the Trustee on
behalf of the Certificateholders.
With respect to the representations and warranties set forth in the
Mortgage Loan Purchase Agreement 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 Master 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, Prepayment Charge 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.
It is understood and agreed that the representations and warranties
set forth in the Mortgage Loan Purchase Agreement shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the
Certificateholders notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Seller set
forth in this Section 2.03(a) to cure, substitute for or repurchase a Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement constitute the sole
remedies available to the Certificateholders and to the Trustee on their behalf
respecting a breach of the representations and warranties contained in the
Mortgage Loan Purchase Agreement.
(b) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which 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
to the Master 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 to the Master 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 or Prepayment Period, as
applicable, preceding the date 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 Depositor
shall give or cause to be given written notice to the Certificateholders that
such substitution has taken place, shall amend the applicable Mortgage Loan
Schedule (and Prepayment Charge Schedule, if applicable) 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, 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 Master
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the
principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage
Interest Rate. On the date of such substitution, the Seller will deliver or
cause to be delivered to the Master 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 notice by the Master Servicer of such deposit, shall release to the Seller
the related Mortgage File or Files and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Seller shall deliver to it and as shall be necessary to vest therein any
Defective Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver
to the Trustee an Opinion of Counsel to the effect that such substitution will
not cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(l) of the Code or on "contributions after the startup date" under
Section 860G(d)(l) of the Code, or (b) any REMIC to fail to qualify as a REMIC
at any time that any Certificate is outstanding. If such Opinion of Counsel can
not be delivered, then such substitution may only be effected at such time as
the required Opinion of Counsel can be given.
(d) Upon discovery by the Seller, the Master Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact 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(c), substitute one or more Eligible Substitute
Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of
discovery or receipt of such notice with respect to such affected Mortgage Loan.
In addition, upon discovery that a Mortgage Loan is defective in a manner that
would cause it to be a "defective obligation" within the meaning of Treasury
regulations relating to REMICs, the 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.
Section 2.04 [Reserved].
Section 2.05 Representations, Warranties and Covenants of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California
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 Master 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 Master Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Master 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 Master Servicer and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; and all requisite corporate action has been taken by the
Master Servicer to make this Agreement valid and binding upon the Master
Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer
and will not result in the breach of any term or provision of the articles
of incorporation or by-laws of the Master Servicer or result in the breach
of any term or provision of, or conflict with or constitute a default
under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Master Servicer or its property is subject, or result in the
violation of any law, rule, regulation, order, judgment or decree to which
the Master Servicer or its property is subject;
(iii) The Master Servicer is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac,
with the facilities, procedures, and experienced personnel necessary for
the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Master Servicer is a HUD approved mortgagee pursuant to Section
203 of the National Housing Act and is in good standing to sell mortgage
loans to and service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no
event has occurred, including but not limited to a change in insurance
coverage, which would make the Master Servicer unable to comply with
Xxxxxx Mae or Xxxxxxx Mac eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Master Servicer, constitute
and will constitute valid, legal and binding obligations of the Master
Servicer, enforceable in accordance with their respective terms, except as
the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally (whether considered in a
proceeding at law or in equity);
(v) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Master Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Master Servicer, or in any material impairment of the right
or ability of the Master Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of the Master
Servicer, or that would draw into question the validity or enforceability
of this Agreement or of any action taken or to be taken in connection with
the obligations of the Master Servicer contemplated herein, or that would
be likely to impair materially the ability of the Master Servicer to
perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Master Servicer of or compliance by the Master Servicer with this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations and orders,
if any, that have been obtained; and
(viii) No information in this Agreement provided by the Master
Servicer nor any information, certificate of an officer, statement
furnished in writing or report delivered to the Trustee by the Master
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.
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 Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan, Prepayment Charge or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 2.06 Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee
on behalf of the Certificateholders and to the Master Servicer 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 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 CE, Class P and Class R Certificates) in
minimum dollar denominations or $25,000 and integral dollar multiples of $1 in
excess. The Class CE and Class P and Class R Certificates are issuable only in
minimum Percentage Interests of 10%. The Class R Certificate is issuable only as
a single certificate. The Trustee acknowledges the issuance of the
uncertificated REMIC Q Regular Interests, the uncertificated REMIC A Regular
Interests, the uncertificated REMIC B Regular Interests, the uncertificated
REMIC 1 Regular Interests, the uncertificated REMIC 2 Regular Interests, the
uncertificated REMIC 3 Regular Interests, and declares that it hold such regular
interests as assets of REMIC A, REMIC B, REMIC 1, REMIC 2, REMIC 3 and REMIC 4,
respectively. The Trustee acknowledges the issuance of (i) the uncertificated
REMIC 4 Components, represented by the Class CE Certificates and (ii) the
uncertificated Class T4-A1, Class T4-A2, Class T4-M1, Class T4-M2, Class T4-M3,
Class T4-M4, Class T4-M5, Class T4-M6 and Class T4-B Interests and the
obligation of the Class CE Certificates to pay Cap Carryover Amounts, and
declares that it hold the same as assets of the Grantor Trust on behalf of the
Holders of the Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class B Certificates, respectively. In addition to the
assets described in the preceding sentence, the assets of the Grantor Trust
shall also include (i) the Swap Agreement and the rights and obligations of the
Class A-2 Certificates with respect thereto, (ii) Prepayment Charges and any
Servicer Prepayment Charge Payment Amounts and the beneficial interest of the
Class P Certificates with respect thereto and (iii) the Yield Maintenance
Agreement, the Reserve Account and the beneficial interest of the Class CE
Certificates with respect thereto, subject to the obligation to pay Cap
Carryover Amounts. The interests evidenced by the Certificates constitute the
entire beneficial ownership interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Servicer.
The Master 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 servicing
similar mortgage loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, 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 Master Servicer may deem necessary or desirable and
consistent with the terms of this Agreement (the "Servicing Standard").
Consistent with the terms of this Agreement, the Master 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 Master Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders; provided, however, that the Master
Servicer shall not make future advances and, except as set forth in the
following sentence or Section 3.03, the Master 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) affect adversely the status of any REMIC constituting part
of the Trust Fund as a REMIC or (iii) cause any such REMIC to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions. In the event that the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable, the Master Servicer may permit a modification of such
Mortgage Loan to reduce the Principal Balance thereof and/or extend the term,
but not beyond the latest maturity date of any other Mortgage Loan.
Notwithstanding the foregoing, the Master 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 Master
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 Master Servicer shall make all required Servicing
Advances and shall service and administer the Mortgage Loans in accordance with
Applicable Regulations, and shall provide to the Mortgagor any reports required
to be provided to them thereby. The Trustee shall execute and deliver to the
Master Servicer within at least fifteen (15) Business Day of receipt, upon
request, any powers of attorney furnished to it by the Master Servicer
empowering the Master Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate any Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Properties, in accordance with this Agreement, and the Trustee shall
execute and deliver such other documents as the Master Servicer may request,
necessary or appropriate to enable the Master Servicer to service and administer
the Mortgage Loans and carry out its duties hereunder, in each case in
accordance with Servicing Standard (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer). Notwithstanding
anything contained herein to the contrary, the Master Servicer shall not without
the Trustee's written consent: (i) initiate any action, suit or proceeding
solely under the Trustee's name without indicating the Master Servicer's
representative capacity, or (ii) take any action with the intent to cause, and
which results in, the Trustee being registered to do business in any state.
In servicing and administering the Mortgage Loans, the Master
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
Certificateholders' reliance on the Master Servicer.
The Master Servicer shall give prompt notice to the Trustee of any
action, of which the Master Servicer has actual knowledge, 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 voluntary Principal Prepayment in full of a Mortgage Loan, the Master
Servicer may not waive any Prepayment Charge or portion thereof required by the
terms of the related Mortgage Note unless (i)(a) the Master Servicer determines
that such waiver is standard and customary in servicing similar mortgage loans,
(b) such waiver relates to a default or a reasonably foreseeable default and (c)
would, in the reasonable judgment of the Master Servicer, maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (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 then applicable law. If the Master Servicer has waived
or does not collect all or a portion of a Prepayment Charge relating to a
voluntary Principal Prepayment in full due to any action or omission of the
Master Servicer, other than as provided above, the Master 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 Servicer Prepayment Charge Amount with
respect to such Mortgage Loan for distribution in accordance with the terms of
this Agreement.
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 or as long as the Mortgage Loan remains
subject to this Agreement, the Master Servicer will diligently collect all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with this Agreement
and Applicable Regulations, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Master Servicer will take special care in ascertaining and
estimating on escrowed Mortgage Loans 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 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 Master Servicer shall
take such action as it shall deem to be in the best interest of the
Certificateholders. With respect to any defaulted Mortgage Loan, the Master
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 Master
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,
including, without limitation, advancing funds for the payment of taxes and
insurance premiums.
Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Master Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Master Servicer shall not
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 would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Master Servicer has also previously determined, based
on its reasonable judgment and a 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 Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(iv).
If the Master 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 Master 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, clean-up or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.05(ii).
Section 3.04 Collection Account, Distribution Account and Reserve
Account.
(a) The Master 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 Master Servicer shall deposit in the Collection Account on a
daily basis within one Business Day 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 Liquidation Proceeds;
(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 Master
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 Master Servicer's
normal servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Master Servicer in
connection with any REO Property pursuant to Section 3.13; and
(vii) all Prepayment Charges collected by the Master Servicer in
connection with the voluntary Principal Prepayment in full of any Mortgage
Loan.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.25, shall accrue to the benefit of the Master Servicer and
the Master 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, bad check fees, prepayment charges that are
not Prepayment Charges or Servicer Prepayment Charge Payment Amounts, assumption
fees and other similar fees need not be deposited by the Master Servicer in the
Collection Account. Amounts deposited in the Collection Account in error may be
withdrawn by the Master Servicer at any time.
(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 Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by 1:00 p.m. New York
time on the Servicer Remittance Date, (i) 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, (ii) the
amount of all Prepayment Charges collected by the Master Servicer in connection
with the voluntary Principal Prepayment in full of any of the Mortgage Loans
then on deposit in the Collection Account (other than any such Prepayment
Charges received after the related Prepayment Period) and (iii) any Servicer
Prepayment Charge Payment Amount. 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. The Trustee
shall be entitled to withdraw from the Distribution Account any amounts owing to
it pursuant to Section 3.30(c) (in its capacity as Auction Administrator),
Section 8.05 and Section 9.01(c) prior to the distribution of any amounts on
deposit to the Certificateholders; provided, however, in the case of amounts
owing to it other than the Trustee Fee, the Trustee shall provide the Depositor
and the Master Servicer with a written account of such amounts five Business
Days prior to withdrawing such funds. In connection with any failure by the
Master Servicer to make any remittance required to be made by the Master
Servicer to the Distribution Account on the day and by the time such remittance
is required to be made under the terms of this Section 3.04(b) (without giving
effect to any grace or cure period), the Master Servicer shall pay to the
Trustee for the account of the Trustee interest at the prime rate of United
States money center commercial banks as published in The Wall Street Journal on
any amount not timely remitted from and including the day such remittance was
required to be made to, but not including, the day on which such remittance was
actually made.
(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 Master Servicer shall give notice to the Trustee of the
location of the Collection Account maintained by it when established and prior
to any change thereof. The Trustee shall give notice to the Master Servicer and
the Depositor of the location of the Distribution Account when established and
prior to any change thereof.
(d) In the event the Master Servicer shall deliver to the Trustee
for deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time request that the Trustee withdraw such amount from
the Distribution Account and remit to the Master Servicer any such amount, any
provision herein to the contrary notwithstanding. In addition, the Master
Servicer shall deliver to the Trustee from time to time for deposit, and the
Trustee shall so deposit, in the Distribution Account in respect of REMIC Q:
(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 amounts required to be deposited in the Distribution
Account by the Master Servicer pursuant to Sections 2.03, 3.04, 3.13,
3.15, 3.16, 3.23, 3.24, 4.07 or 10.01; and
(iv) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.11 in connection with the deductible clause in any
blanket hazard insurance policy, such deposit being made from the Master
Servicer's own funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other
source, the Trustee shall notify the Master 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) Any Prepayment Charges and Servicer Prepayment Charge Payment
Amounts deposited pursuant to Section 3.04(a)(vii) shall not be assets of any
REMIC created hereunder, but shall be considered assets of the Grantor Trust
held by the Trustee for the benefit of the Class P Certificateholders.
(g) (i) The Trustee shall establish and maintain the Reserve
Account, held in trust for the benefit of the Class A-1, Class M and Class B
Certificateholders. 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) sequentially, to the Class A-1, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6 and Class B Certificates,
in that order, an amount equal to any unpaid remaining Cap Carryover
Amounts with respect to such Certificates (after distributions
pursuant to Section 4.02(b)(xxiv) hereof); and
(B) to the Class CE Certificates, any remaining amounts 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 Class CE Certificateholder.
For all federal tax purposes, amounts transferred or reimbursed by REMIC 4
to the Reserve Account shall be treated as distributions by the Trustee to
the Class CE Certificateholder.
(iii) Any Cap Carryover Amounts paid by the Trustee pursuant to this
Section 3.04(g) to the Class A-1, Class M and Class B Certificates shall
be accounted for by the Trustee as amounts paid first to the Class CE
Certificates and then to the respective Class or Classes of Class A-1,
Class M and Class B Certificates. In addition, the Trustee shall account
for the Class A-1, Class M and Class B Certificates' rights to receive
payments of Cap Carryover Amounts as rights in a limited recourse interest
rate cap contract written by the Class CE Certificates in favor of the
Class A-1, Class M and Class B Certificates.
(iv) For federal tax return and information reporting, the right of
the Holders of the Class A-1, Class M and Class B 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 Master Servicer may, from time to time, withdraw from the
Collection Account for the following purposes:
(i) to remit to the Trustee for deposit in the Distribution Account
the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to the first sentence of Section
3.04(d);
(ii) to reimburse itself for (a) any unreimbursed Advances to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Monthly Payments, Liquidation Proceeds and
Insurance Proceeds on Mortgage Loans with respect to which such Advances
were made in accordance with the provisions of Section 4.07; (b) any
unreimbursed Advances with respect to the final liquidation of a Mortgage
Loan that are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with
respect to such Mortgage Loan are insufficient to reimburse the Master
Servicer for such unreimbursed Advances; or (c) subject to Section
4.07(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;
(iii) to reimburse itself for (a) any unpaid Servicing Fees, (b) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Late Collections, Liquidation Proceeds,
Insurance Proceeds and condemnation proceeds received with respect to such
Mortgage Loan, and (c) any Servicing Advances with respect to the final
liquidation of a Mortgage Loan that are Nonrecoverable Advances, but only
to the extent that Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient to
reimburse the Master Servicer for Servicing Advances
(iv) to reimburse itself for any amounts paid or expenses incurred
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
(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 Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Master 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 Master Servicer shall deposit in the Escrow Account or Accounts
on a daily basis within one 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 Master 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 Master 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 Master 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 Master
Servicer (i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire, flood and hazard insurance premiums and comparable items in a
manner and at a time that assures that the lien priority of the Mortgage is not
jeopardized (or, with respect to the payment of taxes, in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien), (ii) to reimburse the Master Servicer
for any Servicing Advance made by the Master 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 with
respect to taxes and assessments and with respect to hazard insurance, (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 Master 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, or (viii) to transfer
to the Collection Account any insurance proceeds. As part of its servicing
duties, the Master 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 Master 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 Mortgage Loan that provides for Escrow
Payments, the Master 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 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 of taxes, assessments, hazard insurance premiums, and comparable
items in a manner and at a time that assures that the lien priority of the
Mortgage is not jeopardized (or, with respect to the payment of taxes, in a
manner and at a time that avoids the loss of the Mortgaged Property due to a tax
sale or the foreclosure as a result of a tax lien). To the extent that the
Mortgage does not provide for Escrow Payments, the Master Servicer shall use its
best efforts to determine that any such payments are made by the Mortgagor at
the time they first become due. If any such payment has not been made and the
Master Servicer receives notice of a tax lien with respect to the Mortgage being
imposed, the Master Servicer will, within 10 business days of such notice,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property.
Section 3.09 Transfer of Accounts.
The Master Servicer may transfer the Collection Account and the
Escrow Account to a different depository institution from time to time. Upon
such transfer, the Master 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 Master Servicer shall cause to be maintained for each 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 or (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. 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 Master 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 National Flood Insurance Act of 1968, as
amended. The Master 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 lesser of (i) 100% of the
maximum insurable value of the improvements securing the Mortgage loan and (ii)
the outstanding Principal Balance of the Mortgage Loan at the time it became an
REO Property, (y) public liability insurance and, (z) to the extent required and
available under the National Flood Insurance Act of 1968, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Master
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
Master 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 Master 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 Master 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 Master
Servicer. The Master Servicer shall not interfere with the Mortgagor's freedom
of choice in selecting either his insurance carrier or agent, provided, however,
that the Master Servicer shall not accept any such insurance policies from
insurance companies unless such companies currently reflect a general policy
rating of B:III 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 Master Servicer shall obtain and maintain a
blanket policy issued by an insurer that has a general policy rating of B:III 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
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with 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 Master Servicer from the
Trust Fund. In connection with its activities as servicer of the Mortgage Loans,
the Master 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 Master 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 Master 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
Master 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 Master 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 Master Servicer from its duties and obligations as
set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by Xxxxxx Mae in the Xxxxxx Xxx MBS Selling and Servicing Guide or by Xxxxxxx
Mac in the Xxxxxxx Mac Servicer's Guide. Upon request of the Trustee, the Master
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.
(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 Master Servicer) in the name of the Trustee or its nominee, 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 Master 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 Master Servicer shall dispose of such REO Property before the
end of the third taxable year beginning after the year of its acquisition by the
Trust Fund for purposes of Section 860G(a)(8) of the Code unless the Master
Servicer has received a grant of extension from the Internal Revenue Service of
the above-mentioned grace period such that the holding by the Trust Fund of such
REO Property subsequent to such period will not: (i) result in the imposition of
any tax on "prohibited transactions" as defined in Section 860F of the Code; or
(ii) cause any REMIC constituting any part of the Trust Fund to fail to qualify
as a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such REO Property.
Subject to 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 Master Servicer has agreed to indemnify
and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
The Master 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 Master 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 Master Servicer shall make or cause to be made a written or
electronic report of each such inspection. Such reports shall be retained in the
Mortgage File and copies thereof shall be forwarded by the Master Servicer to
the Trustee upon request. The Master Servicer shall attempt to sell the same
(and may temporarily rent the same) on such terms and conditions as the Master
Servicer deems to be in the best interest of the Certificateholders and the
Trust Fund.
With respect to each REO Property, the Master 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 Master Servicer shall deposit or cause to be deposited, on a
daily basis, within one Business Day 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 Master Servicer.
The Master 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 Master 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 Master Servicer at
such price and upon such terms and conditions as the Master 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 Master Servicer there were outstanding
unreimbursed Servicing Advances, Servicing Fees and Advances with respect to the
REO Property, the Master Servicer, upon an REO Disposition of such REO Property,
shall be entitled to reimbursement for any related unreimbursed Servicing
Advances, Servicing Fees and Advances from proceeds received in connection with
such REO Disposition. The proceeds from the REO Disposition, net of any payment
to the Master Servicer as provided above, shall be deposited in the Collection
Account for transfer to the Distribution Account on the succeeding Servicer
Remittance Date in accordance with Section 3.04(a)(vi).
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 Master Servicer to
the effect that such sale shall not cause any REMIC constituting part of the
Trust Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements.
When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of such
conveyance or prospective conveyance, exercise its rights to accelerate the
maturity of the related Mortgage Loan under any "due-on-sale" clause contained
in the related Mortgage or Mortgage Note; provided, however, that the Master
Servicer shall not exercise any such right if the "due-on-sale" clause, in the
reasonable belief of the Master Servicer, is not enforceable under applicable
law. In such event, the Master 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 Master 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; provided that no such substitution
will be permitted unless such person satisfies the underwriting criteria of the
Master Servicer and has a credit score at least equal to that of the original
Mortgagor. The Mortgage Loan, as assumed, shall conform in all respects to the
requirements, representations and warranties of this Agreement. The Master
Servicer shall not take or enter into any assumption and modification agreement,
however, unless (to the extent practicable under the circumstances) it shall
have received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy. The Master Servicer shall notify the Trustee
that any such assumption or substitution agreement has been completed by
forwarding to the Trustee 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 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 Master 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 Master Servicer for consenting to
any such conveyance or entering into an assumption or substitution agreement
shall be retained by or paid to the Master Servicer as additional servicing
compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason whatsoever.
Section 3.15 Notification of Adjustments.
On each Adjustment Date, the Master Servicer shall make Mortgage
Interest Rate adjustments for each Adjustable-Rate Mortgage Rate Loan in
compliance with the requirements of the related Mortgage and Mortgage Note and
Applicable Regulations. The Master Servicer shall execute and deliver the
notices required by each Mortgage and Mortgage Note and Applicable Regulations
regarding Mortgage Interest Rate adjustments. Upon the discovery by the Master
Servicer or the Trustee that the Master 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 Master 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 Master Servicer shall be held harmless with
respect to any Mortgage Interest Rate adjustments made by any servicer prior to
the Master Servicer.
Section 3.16 Optional Purchases of Mortgage Loans by Master
Servicer.
The Master Servicer may, at its option, purchase a Mortgage Loan or
REO Property which becomes 90 or more days Delinquent or for which the Master
Servicer has accepted a deed in lieu of foreclosure. Prior to purchase pursuant
to this Section 3.16, the Master Servicer shall be required to continue to make
monthly advances pursuant to Section 4.07. The Master Servicer shall not use any
procedure in selecting Mortgage Loans to be purchased which is materially
adverse to the interests of the Certificateholders. The Master Servicer shall
purchase such Delinquent Mortgage Loan or REO Property at a price equal to the
Purchase Price. The Master Servicer will not be entitled to any Servicing Fee
with respect to any such purchased Mortgage Loan. Any such purchase 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 Master
Servicer to the extent necessary, including the prompt delivery of all
documentation to the Master 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 Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes), the Master Servicer shall
deliver to the Trustee, in written form (with two executed copies) or electronic
form, of a completed "Request for Release" in the form of Exhibit E. Upon
receipt of such Request for Release of Documents, the Trustee shall promptly
release the related Mortgage File within three (3) Business Days via overnight
mail delivery (at the expense of the Master Servicer), in trust, to (i) the
Master Servicer, or (ii) such other party identified in the related Request for
Release. The Trustee agrees to indemnify the Master Servicer, out of its own
funds, for any loss, liability or expense (other than special, indirect,
punitive or consequential damages which will not be paid by the Trustee)
incurred by the Master Servicer as a direct result of the negligence or willful
misconduct by the Trustee in releasing the Mortgage File as provided above. Upon
any such payment in full, or the receipt of such notification that such funds
have been placed in escrow, the Trustee hereby authorizes and empowers the
Master Servicer 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 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.
(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 Master Servicer and delivery to the Trustee, in written form (with two
executed copies) or electronic form, of a "Request for Release" in the form of
Exhibit E signed by a Servicing Officer, release the related Mortgage File to
the Master Servicer within three (3) Business Days 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 Master Servicer. Such receipt shall obligate the Master Servicer
to return the Mortgage File to the Trustee when the need therefor by the Master
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 to the Master Servicer.
(c) Subject to Section 3.01, the Master 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, (iv) modifications, and (v) second mortgage
subordination agreements. No application for approval shall be considered by the
Master 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 Loan-to-Value Ratio and debt-to-income ratio after any
release does not exceed the maximum 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 Master Servicer the
consent or partial release so requested by the Master Servicer. A proposed form
of consent or partial release, as the case may be, shall accompany any Servicing
Officer's certificate delivered by the Master Servicer pursuant to this
paragraph.
Section 3.18 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain the amount of the Servicing Fee with respect to each
Mortgage Loan (including REO Properties). The Master 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, prepayment charges that are not Prepayment Charges or Servicer
Prepayment Charge Payment Amounts, or any other service-related fees and similar
items, to the extent collected from Mortgagors.
Section 3.19 Annual Statement as to Compliance.
(a) The Master Servicer, at its own expense, will deliver to the
Trustee and the Depositor, not later than 60 days following the end of each
calendar year, a Servicing Officer's certificate stating, as to each signer
thereof, that (i) a review of the activities of the Master Servicer during such
preceding fiscal year and of performance under this Agreement has been made
under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer has fulfilled all 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 Master 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 Master
Servicer's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 3.20 Annual Independent Certified Public Accountants'
Reports.
(a) Not later than 60 days following the end of each calendar year,
the Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Trustee, the
Depositor and each Rating Agency, a report stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Master Servicer which includes an assertion that the Master Servicer has
complied with certain minimum residential mortgage loan servicing standards,
identified in 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. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request, provided that such statement is delivered by the Master 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 Master Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master 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 available
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable advance request and during normal business hours
at the offices of the Master Servicer designated by it.
Section 3.22 Duties of Credit Risk Manager.
For and on behalf of the Depositor, the Credit Risk Manager shall
provide reports and recommendations as to loss mitigation activities concerning
Mortgage Loans that are past due, are in default, as to which there has been
commencement of foreclosure, as to which there has been forbearance in exercise
of remedies, as to which any obligor is the subject of bankruptcy, receivership,
or an arrangement of creditors, or which have become REO Properties. Such
reports and recommendations will be based upon information provided pursuant to
the Credit Risk Management Agreement. The Credit Risk Manager shall look solely
to the Master Servicer for all information and data (including loss and
delinquency information and data) and loan-level information and data relating
to the servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Rights of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.23 Obligations of the Master Servicer in Respect of
Compensating Interest.
Not later than the close of business on each Servicer Remittance
Date, the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account an amount ("Compensating Interest") equal to the lesser of
(A) the aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans
for the related Distribution Date resulting from Principal Prepayments on the
Mortgage Loans during the related Prepayment Period and (B) its aggregate
Servicing Fee received in the related Collection Period. The Master Servicer
shall apply Compensating Interest to offset any Prepayment Interest Shortfalls
on the Mortgage Loans. The Master 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 Master Servicer shall
not be obligated to pay Compensating Interest with respect to Relief Act
Interest Shortfalls.
Section 3.24 Obligations of the Master 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 Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement. Notwithstanding the
foregoing, this Section 3.24 shall not limit the ability of the Master Servicer
to seek recovery of any such amounts from the related Mortgagor under the terms
of the related Mortgage Note, as permitted by law.
Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account and the Trustee may direct any depository
institution maintaining the Distribution Account (for purposes of this Section
3.25, each an "Investment Account"), to invest the funds in such Investment
Account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, (i) no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement, if a Person other than
the Trustee is the obligor thereon, and (ii) no later than the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon or if such investment is
managed or advised by the Trustee of an Affiliate. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee or
the Master 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 an Investment Account are at any time invested in a
Permitted Investment payable on demand, the Trustee shall at the direction of
the Master Servicer:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on the
last day such Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount
required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Master Servicer. The Master
Servicer shall deposit in the Collection Account or (to the extent funds in the
Escrow Account are invested if permitted by applicable law) the Escrow Account,
as applicable, 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. All income and gain realized from the investment of funds in the
Distribution Account shall be for the benefit of the Trustee. The Trustee shall
deposit in the Distribution Account the amount of any loss incurred on Permitted
Investments in the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the Voting Rights allocated to any Class of Certificates, shall take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.
The Trustee shall not in any way be held liable by reason of any
insufficiency in any Account held by the Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that the
Trustee is the obligor and has defaulted thereon).
Section 3.26 Liability of Master Servicer; Indemnification.
(a) Subject to clause (b) below and Section 6.03, the Master
Servicer (except the Trustee if it is required to succeed the Master Servicer
hereunder) indemnifies and holds the Trustee, the Depositor and the Trust Fund
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee, the Depositor and the Trust Fund may sustain in
any way related to the failure of the Master Servicer to perform its duties and
service the Mortgage Loans in compliance with the Servicing Standard. The Master
Servicer shall immediately notify the Trustee and the Depositor if a claim is
made that may result in such claims, losses, penalties, fines, forfeitures,
legal fees or related costs, judgments, or any other costs, fees and expenses,
and the Master Servicer shall assume (with the consent of the Trustee) the
defense of any such claim and pay all expenses in connection therewith,
including reasonable counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against the Master Servicer, the
Trustee, the Depositor and/or the Trust Fund in respect of such claim. The
provisions of this Section 3.26 shall survive the termination of this Agreement
and the payment of the outstanding Certificates.
(b) None of the Depositor, the Master Servicer, or any of the
directors, officers, employees or agents of the Depositor or the Master Servicer
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken, or for refraining from the taking of any action, in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor or the Master Servicer or any
such Person against any breach of warranties or representations made by such
party herein, or against any specific liability imposed on the Master Servicer
for a breach of the Servicing Standard and/or this Agreement, or against any
liability which would otherwise be imposed by reason of its respective willful
misfeasance, bad faith, fraud or negligence in the performance of its duties or
by reasons of negligent disregard of its respective obligations or duties
hereunder.
The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer, may rely in good
faith on any document of any kind which, prima facie, is properly executed and
submitted by any appropriate Person with respect to any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
and held harmless by the Trust against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense incurred in connection
with any legal action incurred by reason of its respective misfeasance, bad
faith, fraud or negligence, a breach of a representation or warranty made by
such party hereunder or (in the case of the Master 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 nor the Master Servicer shall be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and in its opinion does not expose it to
any expense or liability; provided, however, that the Depositor or the Master
Servicer may in their discretion undertake any action related to their
obligations hereunder which they may deem necessary or desirable with respect to
this Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder. The Master Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Master Servicer pursuant to Section 6.04 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).
Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.
Beginning in 2003, the Master 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 on or before the due date for any
such report. Not later than 90 days following the end of each calendar year,
beginning in 2003, the Master Servicer will deliver an Officer's Certificate to
the Trustee certifying its compliance with this Section 3.27. The reports from
the Master 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 Limitation of Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Depositor, the Master Servicer, the Trustee or the Certificateholders for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, in reliance upon information provided by the Master
Servicer under the Credit Risk Management Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Credit Risk Manager
or any such person against liability that would otherwise be imposed by reason
of willful malfeasance, bad faith or negligence in its performance of its duties
or by reason of reckless disregard for its obligations and duties under this
Agreement or the applicable Credit Risk Management Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder, and may
rely in good faith upon the accuracy of information furnished by the Master
Servicer pursuant to the applicable Credit Risk Management Agreement in the
performance of its duties thereunder and hereunder.
Section 3.30 Auction Administration Agreement; Swap Agreement.
(a) Concurrently with the execution and delivery hereof, the
Depositor hereby directs the Trustee (in such capacity, the "Auction
Administrator") to execute and deliver the Auction Administration Agreement and
the Swap Agreement substantially in the forms attached hereto as Exhibits O and
P, respectively. The Trustee shall have no duty to determine the adequacy of the
Auction Administration Agreement or the Swap Agreement.
(b) Each Holder of a Class A-2 Certificate is deemed, by acceptance
of such Certificate, (i) to authorize the Trustee to execute and deliver the
Auction Administration Agreement and the Swap Agreement as their intermediary
agent and (ii) to acknowledge and accept and agree to be bound by the provisions
of the Auction Administration Agreement and the Swap Agreement.
(c) The Auction Administrator, or any director, officer, employee or
agent of the Auction Administrator, shall be indemnified and held harmless by
the Trust against any loss, liability or expense (not including expenses and
disbursements incurred or made by the Auction Administrator, including the
compensation and the expenses and disbursements of its agents and counsel, in
the ordinary course of the Auction Administrator's performance in accordance
with the provisions of this Agreement and the Auction Administration Agreement)
incurred by the Auction Administrator arising out of or in connection with the
acceptance or administration of its obligations and duties under the Auction
Administration Agreement, other than any loss, liability or expense (i) that
constitutes a specific liability of the Auction Administrator under this
Agreement or the Auction Administration Agreement or (ii) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence of
the Auction Administrator in the performance of its duties hereunder or under
the Auction Administration Agreement or by reason of the Auction Administrator's
reckless disregard of its obligations and duties hereunder or under the Auction
Administration Agreement. Any amounts payable to the Auction Administrator, or
any director, officer, employee or agent of the Auction Administrator, in
respect of the indemnification provided by this Section 3.30(c), or pursuant to
any other right of reimbursement from the Trust Fund that the Auction
Administrator, or any director, officer, employee or agent of the Auction
Administrator, may have hereunder in its capacity as such, may be withdrawn by
the Auction Administrator from the Distribution Account as set forth in Section
3.04(b).
(d) For federal tax return and information reporting, the right of
the Holders of the Class A-2 Certificates to receive payments under the Swap
Agreement in respect of any swap proceeds shall be assigned a value of zero.
Section 3.31 No Personal Solicitation.
From and after the Closing Date, the Master Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of its
agents and Affiliates, or by any independent contractors or independent mortgage
brokerage companies on the Master Servicer's behalf, to personally, by
telephone, mail or electronic mail, solicit the Mortgagor under any Mortgage
Loan for the purpose of refinancing such Mortgage Loan; provided, that the
Master Servicer may solicit any Mortgagor for whom the Master Servicer has
received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, or the mortgagor initiates a title
search; provided further, it is understood and agreed that promotions undertaken
by the Master Servicer or any of its Affiliates which (i) concern optional
insurance products or other additional products or (ii) are directed to the
general public at large, including, without limitation, mass mailings based on
commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section, nor is the
Master Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer
shall be permitted to include in its monthly statements to borrowers or
otherwise, statements regarding the availability of the Master Servicer's
counseling services with respect to refinancing mortgage loans.
Section 3.32 Periodic Filings.
(a) The Trustee and the Master 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 and file (via the Securities and Exchange Commission's
Electronic Data Gathering and Retrieval System) such Forms on behalf of the
Depositor, if an officer of the Depositor signs the Certification (as defined
below), or otherwise on behalf of the Trust. In the event the Trustee is signing
on behalf of the Depositor pursuant to the preceding sentence, the Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until either the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding the foregoing, in the event the
Securities and Exchange Commission does not accept a Certification signed by the
Depositor where the related Form 10-K is signed by the Trustee on behalf of the
Depositor, the Trustee shall prepare such Form 10-K to be signed by the
Depositor and the Depositor shall sign such Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date, including a copy of the Distribution Date
Statement for such Distribution Date as an exhibit thereto. Prior to March 30th
of each year (or such earlier date as may be required by the Exchange Act and
the rules and regulations of the Securities and Exchange Commission), the
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 Master 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 Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit Q (the "Certification"), which shall, except as described
below, be signed by the senior officer of the Depositor in charge of
securitization. Notwithstanding the foregoing, if it is determined by the
Depositor that multiple Certifications may be executed and filed, the Form 10-K
will instead include Certifications signed by (x) the Trustee, if the Depositor
and the Trustee so agree, otherwise the Depositor, in the form attached hereto
as Exhibit R-1 and (y) a senior officer in charge of servicing at the Master
Servicer in the form attached hereto as Exhibit R-2 and the Trustee may rely on
the certification signed by the Master Servicer to the same extent as provided
in subsection (c) below. If the Depositor signs a certification in the form
attached hereto as Exhibit R-1, the Trustee agrees to provide the back-up
certification, indemnification and contribution to the same extent as set forth
in subsection (c) below.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit R-1) for the benefit of the Depositor 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), and the Master Servicer shall sign a certification (in the form
attached hereto as Exhibit R-2) for the benefit of the Depositor, the Trustee
and their officers, directors and Affiliates. Each such certification shall be
delivered to the Depositor no later than the 20th day prior to the latest date
on which the Form 10-K is permitted to be filed, without regard to extension (or
if such day is not a Business Day, the immediately preceding Business Day) and
the Depositor shall deliver the Certification to be filed to the Trustee no
later than the 10th day prior to the latest date on which the Form 10-K is
permitted to be filed, without regard to extension (or if such day is not a
Business Day, the immediately preceding Business Day). In the event that prior
to the filing date of the Form 10-K in each year, the Trustee or the Master
Servicer has actual knowledge of information material to the Certification, that
party shall promptly notify the Depositor and each of the other parties signing
the certifications. In addition, (i) the Trustee shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any inaccuracy in the certification provided by the
Trustee to the Depositor pursuant to this Section 3.32(c), any breach of the
Trustee's obligations under this Section 3.32(c) or the Trustee's negligence,
bad faith or willful misconduct in connection therewith, and (ii) the Master
Servicer shall indemnify and hold harmless the Depositor, the Trustee and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon any inaccuracy in the certification provided by the Master Servicer to the
Depositor and the Trustee pursuant to this Section 3.32(c), any breach of the
Master Servicer's obligations under this Section 3.32(c) or the Master
Servicer's negligence, bad faith or willful misconduct in connection therewith.
If the indemnification provided for herein is unavailable or insufficient to
hold harmless the Depositor and its officers, directors and Affiliates (and the
Trustee and its officers, directors and Affiliates, in the case of (ii) above),
then (x) the Trustee agrees that it shall contribute to the amount paid or
payable by the Depositor, its officers, directors or Affiliates as a result of
the losses, claims, damages or liabilities of the Depositor, its officers,
directors or Affiliates in such proportion as is appropriate to reflect the
relative fault of the Depositor and its officers, directors and Affiliates on
the one hand and the Trustee on the other in connection with a breach of the
Trustee's obligations under this Section 3.32(c) or the Trustee's negligence,
bad faith or willful misconduct in connection therewith and (y) the Master
Servicer agrees that it shall contribute to the amount paid or payable by the
Depositor or the Trustee and their respective officers, directors and Affiliates
as a result of the losses, claims, damages or liabilities of the Depositor or
the Trustee and their respective officers, directors and Affiliates in such
proportion as is appropriate to reflect the relative fault of the Depositor and
the Trustee and their respective officers, directors and Affiliates on the one
hand and the Master Servicer on the other in connection with a breach of the
Master Servicer's obligations under this Section 3.32(c) or the Master
Servicer's negligence, bad faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) 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) Concurrently, to the Trustee, the Trustee Fee for such
Distribution Date, and to the Credit Risk Manager, the Credit Risk Manager
Fee for such Distribution Date;
(ii) concurrently, as follows:
(a) concurrently, from the Group 1 Interest Remittance Amount
to the Class A-1, Class AIO and Class AIO-INV Certificates, pro
rata, the Accrued Certificate Interest or (in the case of the Class
AIO Certificates) the Group 1 Class AIO Accrued Certificate Interest
for such Distribution Date; and
(b) concurrently, from the Group 2 Interest Remittance Amount
to the Class A-2 Certificates and the Class AIO Certificates, pro
rata, the Accrued Certificate Interest or (in the case of the Class
AIO Certificates) the Group 2 Class AIO Accrued Certificate Interest
for such Distribution Date;
(iii) concurrently, as follows:
(a) concurrently, from the Group 1 Interest Remittance Amount
to the Class A-1, Class AIO and Class AIO-INV Certificates, pro
rata, the Interest Carry Forward Amount for the Class A-1 and Class
AIO-INV Certificates or (in the case of the Class AIO Certificates)
the Group 1 Class AIO Interest Carry Forward Amount for such
Distribution Date; and
(b) concurrently, from the Group 2 Interest Remittance Amount
to the Class A-2 Certificates and the Class AIO Certificates, pro
rata, the Interest Carry Forward Amount for the Class A-2
Certificates or (in the case of the Class AIO Certificates) the
Group 2 Class AIO Interest Carry Forward Amount for such
Distribution Date;
(iv) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is insufficient
to pay the Class A-1 and Class AIO-INV Certificates' Accrued
Certificate Interest or the Class AIO Certificates' Group 1 Class
AIO Accrued Certificate Interest for such Distribution Date pursuant
to Section 4.01(ii)(a) above, concurrently, from the remaining Group
2 Interest Remittance Amount, to the Class A-1, Class AIO-INV and
Class AIO Certificates, pro rata, to cover such shortfall for such
Distribution Date; and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2 Certificates' Accrued Certificate Interest or
the Class AIO Certificates' Group 2 Class AIO Accrued Certificate
Interest for such Distribution Date pursuant to Section 4.01(ii)(b)
above, concurrently, from the remaining Group 1 Interest Remittance
Amount, to the Class A-2 Certificates and the Class AIO
Certificates, pro rata, to cover such shortfall for such
Distribution Date;
(v) concurrently, as follows:
(a) if the Group 1 Interest Remittance Amount is insufficient
to pay the Class A-1 and Class AIO-INV Certificates' Interest Carry
Forward Amount or the Group 1 Class AIO Interest Carry Forward
Amount for such Distribution Date pursuant to Section 4.01(iii)(a)
above, concurrently, from the remaining Group 2 Interest Remittance
Amount, to the Class A-1, Class AIO-INV and Class AIO Certificates,
pro rata, to cover such shortfall for such Distribution Date; and
(b) if the Group 2 Interest Remittance Amount is insufficient
to pay the Class A-2 Certificates' Interest Carry Forward Amount or
the Group 2 Class AIO Interest Carry Forward Amount for such
Distribution Date pursuant to Section 4.01(iii)(b) above,
concurrently, from the remaining Group 1 Interest Remittance Amount,
to the Class A-2 Certificates and the Class AIO Certificates, pro
rata, to cover such shortfall for such Distribution Date;
(vi) to the Class M-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(vii) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(ix) to the Class M-4 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(x) to the Class M-5 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xi) to the Class M-6 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;
(xii) to the Class B Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and
(xiii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above
will be applied as described under Section 4.02(b) hereof.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.
(a) On each Distribution Date, the 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:
first, concurrently, the Class A-1 Principal Distribution
Amount to the Class A-1 Certificates and the Class A-2 Principal
Distribution Amount to the Class A-2 Certificates, until the
Certificate Principal Balances thereof have been reduced to zero;
second, the Class A-2 Principal Distribution Amount remaining
after priority first of this Section 4.02(a)(i), to the Class A-1
Certificates, until the Certificate Principal Balance thereof has
been reduced to zero and the Class A-1 Principal Distribution Amount
remaining after priority first of this Section 4.02(a)(i), to the
Class A-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
third, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
sixth, to the Class M-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
seventh, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eighth, to the Class M-6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
ninth, to the Class B Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(ii) on or after the Stepdown Date and as long as a Trigger Event is
not in effect:
first, concurrently, the Class A-1 Principal Distribution
Amount to the Class A-1 Certificates and the Class A-2 Principal
Distribution Amount to the Class A-2 Certificates, until the
Certificate Principal Balances thereof have been reduced to zero;
second, the Class A-2 Principal Distribution Amount remaining
after priority first of this Section 4.02(a)(ii) above, to the Class
A-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero and the Class A-1 Principal Distribution
Amount remaining after priority first of this Section 4.02(a)(ii)
above, to the Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
third, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-6 Certificates, up to the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero;
ninth, to the Class B Certificates, up to the Class B
Principal Distribution Amount, until the Certificate Principal
Balance thereof has been reduced to zero; and
tenth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set
forth in Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:
(i) to pay any remaining Accrued Certificate Interest for such
Distribution Date, pro rata, for the Class A Certificates;
(ii) to pay any Interest Carry Forward Amounts for such Distribution
Date, pro rata, for the Class A Certificates;
(iii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-1 Certificates;
(iv) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-1 Certificates;
(v) to pay the Class M-1 Realized Loss Amortization Amount for such
Distribution Date;
(vi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-2 Certificates;
(vii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-2 Certificates;
(viii) to pay the Class M-2 Realized Loss Amortization Amount for
such Distribution Date;
(ix) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-3 Certificates;
(x) to pay the remaining Interest Carry Forward Amount, if any, for
the Class M-3 Certificates;
(xi) to pay the Class M-3 Realized Loss Amortization Amount for such
Distribution Date;
(xii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-4 Certificates;
(xiii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-4 Certificates;
(xiv) to pay the Class M-4 Realized Loss Amortization Amount for
such Distribution Date;
(xv) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-5 Certificates;
(xvi) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-5 Certificates;
(xvii) to pay the Class M-5 Realized Loss Amortization Amount for
such Distribution Date;
(xviii) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class M-6 Certificates;
(xix) to pay the remaining Interest Carry Forward Amount, if any,
for the Class M-6 Certificates;
(xx) to pay the Class M-6 Realized Loss Amortization Amount for such
Distribution Date;
(xxi) to pay any remaining unpaid Accrued Certificate Interest for
such Distribution Date for the Class B Certificates;
(xxii) to pay the remaining Interest Carry Forward Amount, if any,
for the Class B Certificates;
(xxiii) to pay the Class B Realized Loss Amortization Amount for
such Distribution Date;
(xxiv) first, to the Class A-1 and Class A-2 Certificates, pro rata,
and then sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5, Class M-6 and Class B Certificates, in that order, any Cap
Carryover Amount for each such Class; and
(xxv) to the Class CE Certificates, up to the Class CE Distributable
Amount for such Distribution Date.
On each Distribution Date, there shall be distributed to the Holder
of the Class R Certificate, any remaining amount in the Distribution Account on
such date after the application pursuant to Sections 4.01, 4.02(a) and
4.02(b)(i)-(xxv).
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Charges collected by the Master Servicer in connection with the Principal
Prepayment in full of any of the Mortgage Loans or any Servicer Prepayment
Charge Payment Amount and shall distribute such amounts to the Holders of the
Class P Certificates. Such amounts shall be treated as having been distributed
to the Holders of the Class P Certificates from the Grantor Trust.
(d) Any amounts distributed to the Offered P&I Certificates in
respect of interest pursuant to Sections 4.01(b)(xxiv) which constitute Cap
Carryover Amounts (taking into account, in the case of the Class A-1 and Class
A-2 Certificates, the parenthetical in clause (ii) of the definition of Cap
Carryover Amount) shall first be deemed distributed by REMIC 4 as a distribution
in respect of the REMIC 4 Components and distributed thereby as a distribution
to the Class CE Certificates in respect of the REMIC 4 Components, and then
distributed to the Offered P&I Certificates from the Grantor Trust as payments
on notional principal contracts in the nature of cap contracts. Any remaining
amount with respect to the REMIC 4 Components or any remaining Yield Maintenance
Agreement Payment shall be treated as having been distributed to the Holders of
the Class CE Certificates from the Grantor Trust.
Section 4.03 Allocation of Losses.
Realized Losses shall be allocated first against the
Overcollateralization Amount until such 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, Class M-6, Class M-5,
Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in that order and
until the respective Certificate Principal Balances thereof are reduced to zero.
Section 4.04 Method of Distribution.
The 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, 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 or the Master Servicer
shall have any responsibility therefor except as otherwise provided by
applicable law.
Section 4.06 Statements.
(a) On each Distribution Date, based on the Mortgage Loan
information contained in the Remittance Report, the Trustee shall prepare and
post on its website at xxx.xxxxxxx.xxx, a statement (the "Distribution Date
Statement") as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Certificates allocable to principal or
reduction of Notional Amount, separately identified and the amount of the
distribution made on such Distribution Date to the Holders of the Class P
Certificates allocable to Prepayment Charges and Servicer Prepayment
Charge Payment Amounts;
(ii) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to interest or
Class CE Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the
Overcollateralization Target Amount as of such Distribution Date and the
Monthly Excess Interest Amount and Monthly Excess Cashflow Amount for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by the
Master Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related Collection
Period, cumulative unreimbursed Advances and Servicing Advances and
cumulative Nonrecoverable Advances;
(vi) the Pool Balance, at the close of business at the end of the
related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate unpaid principal balance of Mortgage
Loans (a) 30 to 59 days past due on a contractual basis, (b) 60 to 89 days
past due on a contractual basis, (c) 90 or more days past due on a
contractual basis, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(ix) 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 Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses;
(xiii) 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;
(xiv) the Accrued Certificate Interest in respect of each Class of
Certificates for such Distribution Date and any related Cap Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such Certificates on such
Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the
Master Servicer pursuant to Section 3.23;
(xvi) the amount of the Trustee Fee paid;
(xvii) the Cap Carryover Amounts distributed on such Distribution
Date, the amounts remaining after giving effect to distributions thereof
on such Distribution Date and the amount of all Cap Carryover Amounts
covered by withdrawals from the Reserve Account on such Distribution Date;
(xviii) any Overcollateralization Deficiency after giving effect to
the distribution of principal on such Distribution Date;
(xix) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xx) the Available Funds;
(xxi) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;
(xxii) the information contained in the Liquidation Report for such
Distribution Date;
(xxiii) the aggregate Principal Balance of Mortgage Loans purchased
by the Master 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;
(xxiv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Master Servicer during the related Collection Period in
connection with Section 3.16;
(xxv) the amount of the Credit Risk Manager Fee paid; and
(xxvi) the Mortgage Loan identifying number of each Mortgage Loan
with a Prepayment Charge that was the subject of a Principal Prepayment in
full during the related Collection Period, the Prepayment Charge listed on
each related Mortgage Note and the Prepayment Charge collected or the
Servicer Prepayment Charge Payment Amount paid by the Master Servicer with
respect to each such Mortgage Loan.
The Trustee may fully rely upon and shall have no liability with
respect to information with respect to the Mortgage Loans provided by the Master
Servicer.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.
(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), (xiv) and (xvii) above, aggregated for such calendar year
or applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished
by the Trustee to Certificateholders pursuant to any requirements of the Code as
are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to the
Class R Certificateholder a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the 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 Class R
Certificateholder 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,
the Master Servicer shall deliver to the Trustee by telecopy (or by such other
means as the Master 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 Master Servicer shall electronically forward to the Trustee in such
medium as may be agreed between the Master Servicer and the Trustee the
information set forth in such Remittance Report with respect to the related
Distribution Date and such information reasonably available to the Master
Servicer necessary in order for the Trustee to perform the calculations
necessary to make the distributions contemplated by Section 4.01, 4.02 and 4.03
and to prepare the Distribution Date Statement. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.07(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 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
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for such Collection Period, over
the net income from such REO Property transferred to the Distribution 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.
On or before 1:00 p.m. New York time on the Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans 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 Master Servicer in discharge of any
such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Master Servicer with
respect to the Mortgage Loans. Any amounts held for future distribution and so
used shall be appropriately reflected in the Master Servicer's records and
replaced by the Master Servicer by deposit in the Collection Account on or
before any future 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 Master Servicer by telecopy by the close of business on any
Servicer Remittance Date in the event that the amount remitted by the Master
Servicer to the Trustee on such date is less than the Advances required to be
made by the Master Servicer for the related Distribution Date, as set forth in
the related Remittance Report.
(c) The obligation of the Master 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, 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 Master Servicer
if such Advance would, if made, constitute a Nonrecoverable Advance. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officers' Certificate of the Master Servicer
delivered to the Depositor and the Trustee. The Trustee shall be entitled to
conclusively rely upon any such determination by the Master Servicer.
Section 4.08 REMIC Distributions.
(a) REMIC 4. On each Distribution Date, the timing and amounts of
principal and interest distributions and allocations of Applied Realized Loss
Amounts and Realized Loss Amortization Amounts on each Class of REMIC 4 Regular
Interests (other than the REMIC 4 Components) and the Class AIO and Class
AIO-INV Certificates shall be identical to the timing, amounts and allocations
on the corresponding Classes of Certificates (other than the Class CE, Class P
and Class R Certificates), except that the Pass-Through Rate of any P&I Regular
Interest shall not exceed the pass-through rate as set forth in the definition
thereof, and any amount paid in respect of a Class of Offered P&I Certificates
as a Cap Carryover Amount (other than from any Yield Maintenance Agreement
Payment), whether with respect to the Distribution Date on which such amount is
paid or a prior Distribution Date, shall be treated as a distribution by REMIC 4
in respect of the REMIC 4 Components, beneficially owned by the Class CE
Certificates, then as paid by the Class CE Certificates to the applicable Class
of Offered P&I Certificates as a payment from the Grantor Trust outside of the
REMICs. Interest (and in the case of the Class T4-4 Interest, principal) shall
be deemed distributed to each Class of REMIC 4 Components as follows: (i) the
Class T4-1010, Class T4-1020, Class T4-4, Class T4-11, Class T4-12 and Class
T4-13 Interests shall be entitled to all distributions on the Class T3-1010,
Class T3-1020, Class T3-4, Class T3-11, Class T3-12 and Class T3-13 Interests,
respectively; (ii) the Class T4-A1IO, Class T4-A2IO, Class T4-M1IO, Class
T4-M2-IO, Class T4-M3IO, Class T4-M4IO, Class T4-M5IO, Class T4-M6IO and Class
T4-BIO Interests shall be entitled to a specified portion of interest payments
consisting of the excess of interest distributable on each of the Class T3-A1
and Class T3-101 Interests (in the aggregate), Class T3-A2 and Class T3-102
Interests (in the aggregate), Class T3-M1, Class T3-M2, Class T3-M3, Class
T3-M4, Class T3-M5, Class T3-M6 and Class T3-B Interests over interest
distributable on the Class T4-A1, Class T4-A2, Class T4-M1, Class T4-M2, Class
T4-M3, Class T4-M4, Class T4-M5, Class T4-M6 and Class T4-B Interests,
respectively; (iii) on any Distribution Date on which the Group 1 Cap exceeds
the Class A-1 REMIC Pass-Through Rate, the Class T4-101 Interest shall be
entitled to a specified portion of interest payments consisting of the excess of
interest distributable on the Class T3-101 Interest over the interest
distributable on the portion of the Class T4-A1 Interest corresponding to the
Class T3-101 Interest; (iv) on any Distribution Date on which the Pool Cap
exceeds the Class A-1 REMIC Pass-Through Rate, the Class T4-A1IO Interest shall
be entitled to a specified portion of interest payments consisting of the excess
of interest distributable on the Class T3-A1 Interest over the interest
distributable on the portion of the Class T4-A1 Interest corresponding to the
Class T3-A1 Interest; (v) on any Distribution Date on which the Group 2 Cap
exceeds the Class A-2 REMIC Pass-Through Rate, the Class T4-102 Interest shall
be entitled to a specified portion of interest payments consisting of the excess
of interest distributable on the Class T3-102 Interest over the interest
distributable on the portion of the Class T4-A2 Interest corresponding to the
Class T3-102 Interest; and (vi) on any Distribution Date on which the Pool Cap
exceeds the Class A-2 REMIC Pass-Through Rate, the Class T4-A2IO Interest shall
be entitled to a specified portion of interest payments consisting of the excess
of interest distributable on the Class T3-A2 Interest over the interest
distributable on the portion of the Class T4-A2 Interest corresponding to the
Class T3-A2 Interest. Any shortfalls of interest, including any Realized Losses
allocated to reduce the Subsequent Overcollateralization Amount, shall be borne,
first, by the REMIC 4 Components, pro rata based on interest accrued, before
being allocated to the applicable P&I Regular Interests and the Class AIO and
Class AIO-INV Certificates. Realized Losses allocated to the Class T4-4 Interest
shall equal Realized Losses allocated to the Class T3-4 Interest pursuant to
Section 4.08(b). The Class CE Certificates shall be deemed to receive the
aggregate of the amounts distributable in respect of the REMIC 4 Components,
notwithstanding that a portion of such amount is applied to pay any Cap
Carryover Amount. Amounts deemed distributed in respect of the P&I Regular
Interests shall be treated as held by the Grantor Trust for distribution in
accordance with Sections 4.01 and 4.02. Any portion of the Available Funds
remaining in REMIC 4 on a Distribution Date shall be distributed to the Class R
Certificate in respect of the Class R-4 Interest.
(b) REMIC 3. On each Distribution Date, the timing and amounts of
principal and interest distributions and allocations of Applied Realized Loss
Amounts and Realized Loss Amortization Amounts on the Classes of REMIC 3 Regular
Interests identified as Corresponding Classes shall be identical to the timing,
amounts and allocations in respect of Corresponding Classes of REMIC 4 Regular
Interests and the Class AIO and Class AIO-INV Certificates pursuant to Section
4.08(a). The Class T3-4 Interest shall be entitled to all distributions on the
Class T2-4 Interest. The Class T3-101 Interest shall be entitled to (a) all
distributions of principal on the Class T2-101 Interest and (b) all
distributions of interest on the Class T2-101 Interest up to the Group 1 Cap;
the Class T3-1010 Interest shall be entitled to any distributions of interest on
the Class T2-101 Interest in excess of the Group 1 Cap. The Class T3-102
Interest shall be entitled to (a) all distributions of principal on the Class
T2-102 Interest and (b) all distributions of interest on the Class T2-102
Interest up to the Group 2 Cap; the Class T3-1020 Interest shall be entitled to
any distributions of interest on the Class T2-102 Interest in excess of the
Group 2 Cap. Interest shortfalls will reduce interest payable, first, on the
Class T3-4 Interest, to the same extent that interest shortfalls are allocable
to the Class T2-4 Interest; second, on the Class T3-11, Class T3-12 and Class
T3-13 Interests, pro rata; third, on the Class T3-B, Class T3-M6, Class T3-M5,
Class T3-M4, Class T3-M3, Class T3-M2 and Class T3-M1 Interests, in that order;
and fourth, on the Class T3-A1, Class T3-A2, Class T3-AIO and Class T3-INV
Interests, pro rata; provided, that the portion of the interest payable on the
Class T3-B, Class T3-M6, Class T3-M5, Class T3-M4, Class T3-M3, Class T3-M2,
Class T3-M1, Class T3-A1 and Class T3-A2 Interests attributable to the Class
T4-BIO, Class T4-M6IO, Class T4-M5IO, Class T4-M4IO, Class T4-M3IO, Class
T4-M2IO, Class T4-M1IO, Class T4-A1IO and Class T4-A2IO Interests shall bear
interest shortfalls pro rata and prior to the allocation of any remaining
shortfalls to such Interests. Amounts of principal and interest distributed in
respect of, and Realized Losses allocated to, the Class T3-4 Interest shall
equal the allocations made to the Class T2-4 Interest, reduced by any allocation
of interest shortfalls to the Class T3-4 Interest pursuant to the preceding
sentence. Amounts in the Distribution Account deemed distributed in respect of
the REMIC 3 Regular Interests shall be treated as held by REMIC 4 for
distribution in accordance with Sections 4.08(a). Any portion of Available Funds
remaining in REMIC 3 on a Distribution Date shall be distributed to the Class R
Certificate in respect of the Class R-3 Interest.
(c) REMIC 2. On each Distribution Date, the timing and amounts of
principal distributions and allocations of Realized Losses on each Class of
REMIC 2 Regular Interests shall be identical to the timing, amounts and
allocations in respect of the corresponding Classes of REMIC 1 Regular Interests
pursuant to Section 4.08(d). For these purposes, the Class T2-1 and Class T2-11
Interests correspond to the Class T1-1 Interest, the Class T2-2 and Class T2-12
Interests correspond to the Class T1-2 Interest, the Class T2-3 and Class T2-13
Interests correspond to the Class T1-3 Interest, the Class T2-101 Interest
corresponds to the Class T1-101 Interest, the Class T2-102 Interest corresponds
to the Class T1-102 Interest and the Class T2-4 Interest corresponds to the
Class T1-4 Interest. Interest will accrue on each of the Class T2-1, Class T2-2
and Class T2-3 Interests at the REMIC 2 Pass-Through Rate. Interest will accrue
on each of the Class T2-11, Class T2-12 and Class T2-13 Interests at the excess,
if any, of the INV Adjusted Weighted Average Net Mortgage Rate over the REMIC 2
Pass-Through Rate. Interest will accrue on the Class T2-4 Interest at the
Adjusted Weighted Average Net Mortgage Rate. Interest will accrue on the Class
T2-AIO Interest at the Class AIO Pass-Through Rate. Interest will accrue on the
Class T2-INV Interest at the Class AIO-INV Pass-Through Rate. Any shortfalls of
interest will be allocated, first, to the Class T2-4 Interest to the extent that
interest shortfalls are allocated to the Class T1-4 Interest; second, pro rata,
to the Class T2-11, Class T2-12 and Class T2-13 Interests; and third, pro rata,
to the Class T2-1, Class T2-101, Class T2-102, Class T2-2 and Class T2-3
Interests. Interest shortfalls allocated to the Class AIO-INV and Class AIO
Certificates shall be allocated to the Class T2-AIO and Class T2-INV Interests,
respectively. Amounts in the Distribution Account deemed distributed in respect
of the REMIC 2 Regular Interests shall be treated as held by REMIC 3 for
distribution in accordance with Section 4.08(b). Any portion of Available Funds
remaining in REMIC 2 on a Distribution Date shall be distributed to the Class R
Certificate in respect of the Class R-2 Interest.
(d) REMIC 1. On each Distribution Date, the REMIC 1 Regular
Interests shall receive distributions of interest and principal equal in the
aggregate to amounts distributable pursuant to Sections 4.01 and 4.02 (other
than to the Class R Certificate in respect of the Class R-4 Interest) from
amounts on deposit in the Distribution Account. Such amounts with respect to
interest shall accrue (i) at the Adjusted Weighted Average Net Mortgage Rate on
the Class T1-1, Class T1-2 and Class T1-3 Regular Interests and at the INV
Adjusted Weighted Average Net Mortgage Rate on the Class T1-4 Regular Interests,
(ii) at the INV Adjusted Group 1 Pass-Through Rate with respect to the Class
X0-000 Xxxxxxxx, (xxx) at the Group 2 Pass-Through Rate with respect to the
Class T1-102 Interest, (iv) at the Class AIO Pass-Through Rate with respect to
the Class T1-AIO Interest and (v) at the Class AIO-INV Pass-Through Rate with
respect to the Class T1-INV Interest. Any shortfalls of interest will be
allocated first, to the Class T1-4 Interest, to the extent that interest
shortfalls are allocated to the Class TB-4 Interest; second, to the Class T1-AIO
Interest, to the extent that interest shortfalls are allocated to the Class AIO
Certificates; third, to the Class T1-INV Interest, to the extent that interest
shortfalls are allocated to the Class AIO-INV Certificates; and then to the
Class T1-1, Class T1-101, Class T1-102, Class T1-2 and Class T1-3 Interests, pro
rata based on interest accrued. Amounts in reduction of principal balance of the
REMIC 1 Regular Interests shall be allocated to the Class T1-1, Class T1-101,
Class T1-102, Class T1-2 and Class T1-3 Interests in the aggregate in an amount
equal to the Principal Remittance Amount less the lesser of the
Overcollateralization Release Amount and the Overcollateralization Amount. Such
aggregate amount shall be allocated so that the principal balance of the Class
T1-1, Class T1-101, Class T1-102, Class T1-2 and Class T1-3 Interests equal the
amounts specified in the definitions thereof in Article I. Amounts in reduction
of principal balance shall be allocated to the Class T1-4 Interest, to the
extent such amounts are allocated to the Class TB-4 Interest. Realized Losses
shall be allocated first to the Class T1-4 Interest, to the extent such Realized
Losses are allocated to the Class TB-4 Interest, and then pro rata to the Class
T1-1, Class T1-101, Class T1-102, Class T1-2 and Class T1-3 Interests. Such
amounts with respect to principal and any Realized Losses with respect to
principal shall reduce the principal balances of the REMIC 1 Regular Interests
so that, in the aggregate, such balances correspond to the Pool Balance of the
Mortgage Loans as of the last day of the related Collection Period. Amounts in
the Distribution Account deemed distributed in respect of the REMIC 1 Regular
Interests shall be treated as held by REMIC 2 for distribution in accordance
with Section 4.08(c). Any amounts remaining in REMIC 1 on a Distribution Date
shall be distributed to the Class R Certificate in respect of the Class R-1
Interest.
(e) REMICs Q, A and B.
(1) REMIC Q. On each Distribution Date, the REMIC Q
Regular Interests shall receive distributions of interest and
principal equal in the aggregate to amounts distributable
pursuant to Sections 4.01 and 4.02 (other than to the Class R
Certificate in respect of the Class R-4 Interest) from amounts
on deposit in the Distribution Account. Such amounts in
respect to interest shall accrue (i) on the Class TQ-1
Interest at the INV Adjusted Group 1 Weighted Average Net
Mortgage Rate, (ii) on the Class TQ-2 Interest at the Weighted
Average Net Mortgage Rate of the Group 2 Mortgage Loans and
(iii) on the Class TQ-INV Interest at the Class AIO-INV
Pass-Through Rate. Any shortfalls of interest with respect to
the Group 1 Mortgage Loans shall be allocated first to the
Class TQ-1 Interest and then to the Class TQ-INV Interest. Any
shortfalls of interest with respect to the Group 2 Mortgage
Loans shall be allocated to the Class TQ-2 Interest.
Distributions of principal and Realized Losses with respect to
the Group 1 Mortgage Loans shall be allocated to the Class
TQ-1 Interest. Distributions of principal and Realized Losses
with respect to the Group 2 Mortgage Loans shall be allocated
to the Class TQ-2 Interest. Such amounts with respect to
principal and any Realized Losses with respect to principal
shall reduce the principal balances of the REMIC Q Regular
Interests so that, in the aggregate, such balances correspond
to the Pool Balance of the Mortgage Loans as of the last day
of the related Collection Period. Amounts in the Distribution
Account deemed distributed in respect of the REMIC Q Regular
Interests shall be treated as held by REMIC A for distribution
in accordance with Section 4.08(e)(2). Any amounts remaining
in REMIC Q on a Distribution Date shall be distributed to the
Class R Certificate in respect of the Class R-Q Interest.
(2) REMIC A. On each Distribution Date, the REMIC A
Regular Interests shall receive distributions of interest and
principal equal in the aggregate to amounts distributable
pursuant to Sections 4.01 and 4.02 (other than to the Class R
Certificate in respect of the Class R-4 Interest) from amounts
distributed in respect of the REMIC Q Regular Interests. Such
amounts with respect to interest shall accrue (i) at the INV
Adjusted Weighted Average Net Mortgage Rate on each of the
Class TA-1, Class TA-2 and Class TA-4 Interests, (ii) at the
INV Adjusted Group 1 Weighted Average Net Mortgage Rate on the
Class TA-101 Interest, (iii) at the Weighted Average Net
Mortgage Rate of the Group 2 Mortgage Loans on the Class
TA-102 Interest, and (iii) at the Class AIO-INV Pass-Through
Rate on the Class TA-INV Interest. Any shortfalls of interest
allocated to the Class TQ-INV Interest in REMIC Q shall be
likewise allocated to the Class TA-INV Interest. Any
shortfalls of interest allocated to the Class TQ-1 and TQ-2
Interests in REMIC Q shall be allocated, first, to the Class
TA-4 Interest, second, to the Class TA-1 Interest, third, to
Class TA-2 Interest and fourth, any remaining interest
shortfalls with respect to the Group 1 Mortgage Loans shall be
allocated to the Class TA-101 Interest and any remaining
interest shortfalls with respect to the Group 2 Mortgage Loans
shall be allocated to the Class TA-102 Interest. Amounts in
reduction of principal balance of the REMIC A Regular
Interests shall be allocated first, to the Class TA-4 Interest
such that the principal balance of the Class TA-4 Interest is
equal to the Remaining Overcollateralization Amount and then
to the Class TA-1, Class TA-101, Class TA-102 and TA-2
Interest as described in the following two sentences. Amounts
in reduction of principal balance of the REMIC A Regular
Interests shall be allocated to the Class TA-1, Class TA-101,
Class TA-102 and Class TA-2 Interests in the aggregate in an
amount equal to the Principal Remittance Amount less the
lesser of the Overcollateralization Release Amount and the
Overcollateralization Amount. Such aggregate amount shall be
allocated first to the Class XX-0, Xxxxx XX-000 xxx XX-000
Interests so that the Class TA-101 Interest and the Class
TA-102 Interest have principal balances equal the amounts
described in the definitions of Class TA-101 Principal Amount
and Class TA-102 Principal Amount, respectively, with any
remaining amounts allocated to the Class TA-1 Interest, until
such Classes are reduced to zero and second to the Class TA-2
Interest, until such Class is reduced to zero. Realized Losses
shall be allocated first to the Class TA-4 Interest, until
such Class is reduced to zero, second to the Class XX-0, Xxxxx
XX-000 xxx XX-000 Interests so that the Class TA-101 Interest
and the Class TA-102 Interest have principal balances equal
the amounts described in the definitions of Class TA-101
Principal Amount and Class TA-102 Principal Amount,
respectively, with any remaining amounts allocated to the
Class TA-1 Interest, until such Classes are reduced to zero,
and third to the Class TA-2 Interest, until such Class is
reduced to zero. Such amounts with respect to principal and
any Realized Losses with respect to principal shall reduce the
principal balances of the REMIC A Regular Interests so that,
in the aggregate, such balances correspond to the Pool Balance
of the Mortgage Loans as of the last day of the related
Collection Period. Amounts in the Distribution Account deemed
distributed in respect of the REMIC A Regular Interests shall
be treated as held by REMIC B for distribution in accordance
with Section 4.08(e)(3). Any amounts remaining in REMIC A on a
Distribution Date shall be distributed to the Class R
Certificate in respect of the Class R-A Interest.
(3) REMIC B. On each Distribution Date, the timing and
amounts of principal distributions and allocations of Realized
Losses on each Class of REMIC B Regular Interests shall be
identical to the timing, amounts and allocations in respect of
the corresponding Classes of REMIC A Regular Interests
pursuant to Section 4.08(e)(1). For these purposes, the Class
TB-1 Interest corresponds to the Class TA-1 Interest, the
Class TB-101 Interest corresponds to the Class TA-101
Interest, the Class TB-102 Interest corresponds to the Class
TA-102 Interest, the Class TB-2 and Class TB-AIO Interests in
the aggregate correspond to the Class TA-2 Interest, and the
Class TB-4 Interest corresponds to the Class TA-4 Interest.
Interest will accrue on each of the Class TB-1 and Class TB-4
Interest at the INV Adjusted Weighted Average Net Mortgage
Rate. Interest will accrue on the Class TB-2 Interest at the
excess, if any, of the INV Adjusted Weighted Average Net
Mortgage Rate over the Class AIO Pass-Through Rate. Interest
will accrue on the Class TB-AIO Interest at the Class AIO
Pass-Through Rate. Interest will accrue on the Class TB-101
Interest at the INV Adjusted Group 1 Weighted Average Net
Mortgage Rate. Interest will accrue on the Class TB-102
Interest at the Weighted Average Net Mortgage Rate of the
Group 2 Mortgage Loans. Interest will accrue on the Class
TB-INV Interest at the Class AIO-INV Pass-Through Rate. Any
shortfalls of interest allocated to the TA-INV Interest in
REMIC A will likewise be allocated to the Class TB-INV
Interest. Any shortfalls of interest allocated to the Class
AIO Certificates will be allocated to the Class TB-AIO
Interest, Any other shortfalls of interest will be allocated,
first, to the Class TB-4 Interest to the extent that interest
shortfalls are allocated to the Class TA-4 Interest; second,
to the Class TB-1, Class TB-101 and Class TB-102 Interests to
the extent that interest shortfalls are allocated to the Class
TA-1, Class TA-101 and Class TA-102 Interests, respectively;
and third, to the Class TB-2 Interest to the extent that
interest shortfalls are allocated to the Class TA-2 Interest.
Amounts in the Distribution Account deemed distributed in
respect of the REMIC B Regular Interests shall be treated as
held by REMIC 1 for distribution in accordance with Section
4.08(d). Any portion of Available Funds remaining in REMIC B
on a Distribution Date shall be distributed to the Class R
Certificate in respect of the Class R-B Interest.
(f) [Reserved]
(g) 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 A-1, Class A-2, Class AIO, Class AIO-INV, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-4, Class M-6, Class B, Class CE,
Class P and Class R Certificates shall be substantially in the forms annexed
hereto as exhibits, and shall, on original issue, be executed by the 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 (or notional amount)
denomination of $25,000 and integral multiples of $1 in excess thereof. The
Class CE and Class P Certificates are issuable only in minimum Percentage
Interests of 10%. The Class R Certificate is issuable only as a single
certificate.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of the 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
(other than the Class B Certificates) shall be Book-Entry Certificates. The
Class B, Class CE, Class P and Class R Certificates shall not be Book-Entry
Certificates but shall be issued in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the 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 Master Servicer and the Depositor,
such resignation to become effective upon appointment of a successor Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute and the Certificate Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
the Certificate Registrar shall authenticate and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Certificate Custodian, on behalf of the Depository,
if directed to do so pursuant to instructions from the Depository. Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
with the consent of the Trustee, elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of a Servicer Event of
Termination, the Certificate Owners of each Class of Book-Entry Certificates
representing Percentage Interests of such Classes aggregating not less than 51%
advises the Trustee and Depository through the Financial Intermediaries and the
Depository Participants in writing that the continuation of a book-entry system
through the Depository to the exclusion of definitive, fully registered
certificates (the "Definitive Certificates") to Certificate Owners is no longer
in the best interests of the Certificate Owners. Upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall, at the Depositor's expense, in the case of (ii) above, or the
Seller's expense, in the case of (i) and (iii) above, execute on behalf of the
Trust and the Certificate Registrar shall authenticate the Definitive
Certificates. None of the Depositor or the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee, the Certificate Registrar, the Master Servicer, any
Paying Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer, (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Certificate
Registrar, in substantially the form attached hereto as Exhibit J) under the
1933 Act, the Certificate Registrar and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and in form and
substance reasonably satisfactory to the Certificate Registrar and the Depositor
that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the 1933 Act or is being made
pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of
the Certificate Registrar or the Depositor or (ii) the Certificate Registrar
shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Certificate Registrar certifying to the Depositor and the
Certificate Registrar the facts surrounding such transfer, which investment
letter shall not be an expense of the Certificate Registrar or the Depositor.
The Holder of a Private Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Certificate Registrar and the Depositor
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Certificate Registrar shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Certificate Registrar and the Depositor, (such requirement
is satisfied only by the Certificate Registrar's receipt of a representation
letter from the transferee substantially in the form of Exhibit I hereto, as
appropriate), to the effect that such transferee is not an employee benefit plan
or arrangement subject to Section 406 of ERISA 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 CE or Class P 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 the Class R Certificate) in the
case of any such ERISA Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Certificate Registrar, to the effect that
the purchase or holding of such ERISA Restricted Certificate will not 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
Depositor, the Master Servicer, the Trustee or the Certificate Registrar to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of clause (i) of the preceding sentence, such
representation shall be deemed to have been made to the Certificate Registrar by
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates, unless the Certificate Registrar shall
have received from the transferee an alternative representation acceptable in
form and substance to the Depositor. Notwithstanding anything else to the
contrary herein, any purported transfer of an ERISA-Restricted Certificate to or
on behalf of an employee benefit plan subject to ERISA 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 the
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in the Class R Certificate are expressly subject to the
following provisions:
(i) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Certificate Registrar of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in the Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in the Class R Certificate, the Certificate Registrar shall as a
condition to registration of the transfer, require delivery to it, in form
and substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such transferee is a
Permitted Transferee and that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Class R Certificate.
(iv) Any attempted or purported transfer of any Ownership Interest
in the Class R Certificate in violation of the provisions of this Section
shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become the Holder of the Class R
Certificate, then the prior Holder of such Class R Certificate that is a
Permitted Transferee shall, upon discovery that the registration of
transfer of such Class R Certificate was not in fact permitted by this
Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Class R Certificate. The
Certificate Registrar shall be under no liability to any Person for any
registration of transfer of the Class R Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Class R Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Certificate Registrar received the documents specified in clause
(iii). The Trustee shall be entitled to recover from any Holder of the
Class R Certificate that was in fact not a Permitted Transferee at the
time such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall be
distributed and delivered by the Trustee to the prior Holder of such Class
R Certificate that is a Permitted Transferee.
(v) If any Person other than a Disqualified Organization acquires
any Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have
the right but not the obligation, without notice to the Holder of the
Class R Certificate or any other Person having an Ownership Interest
therein, to notify the Depositor to arrange for the sale of the Class R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of the Class R Certificate
that is a Permitted Transferee, except that in the event that the Trustee
determines that the Holder of the Class R Certificate may be liable for
any amount due under this Section or any other provisions of this
Agreement, the 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 the Class R Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in the Class R Certificate in violation of the
restrictions in this Section, then the 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 Master Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Master 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
Master Servicer, the Trust, the Trustee nor any agent of any of them shall be
affected by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders from
the Distribution Account pursuant to Section 4.01 and 4.02 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent may
include the obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the 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 Master Servicer and the Depositor, such resignation to become
effective upon appointment of a successor Paying Agent.
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
The Master Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Master Servicer herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor.
Any entity into which the Master Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the 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 Master Servicer and
Others.
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master 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 Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master 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 Master Servicer and any director or officer or employee
or agent of the Master 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 Master 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 Master 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 Master Servicer's
right to indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Master Servicer pursuant to Section 6.04 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 Master
Servicer solely in its capacity as Master Servicer hereunder and in no other
capacities.
Section 6.04 Master Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Master 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 Master
Servicer so causing such a conflict being of a type and nature carried on by the
Master Servicer or its subsidiaries or Affiliates at the date of this Agreement
or (ii) upon satisfaction of the following conditions: (a) the Master 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 Master 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 Master
Servicer shall become effective until such successor servicer or, in the case of
(i) above, the Trustee shall have assumed the Master 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 Master 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 Master Servicer. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee.
Section 6.05 Delegation of Duties.
(a) In the ordinary course of business, the Master 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 Master 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 Master 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 Master Servicer's Affiliates or their respective
successors and assigns.
(b) The Master Servicer is hereby authorized to enter into a
financing or other facility (any such arrangement, an "Advance Facility") under
which (1) the Master Servicer assigns or pledges to another Person (together
with such Person's successors and assigns, an "Advancing Person") the Master
Servicer's rights under this Agreement to be reimbursed for any Advances or
Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
Advances and/or Servicing Advances required to be made by the Master Servicer
pursuant to this Agreement. No consent of the Depositor, the Trustee, the
Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. The Master Servicer shall notify
each other party to this Agreement prior to or promptly after entering into or
terminating any Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund Advances and/or
Servicing Advances on the Master Servicer's behalf, the Master Servicer shall
remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances and/or Servicing Advances, as
applicable, pursuant to this Agreement, then the Master Servicer shall not be
permitted to reimburse itself for Advances and/or Servicing Advances, but
instead the Master Servicer shall be required to remit amounts collected that
would otherwise be retained by the Master Servicer to reimburse it for
previously unreimbursed Advances ("Advance Reimbursement Amounts") and/or
previously unreimbursed Servicing Advances ("Servicing Advance Reimbursement
Amounts" and together with Advance Reimbursement Amounts, "Reimbursement
Amounts") (in each case to the extent such type of Reimbursement Amount is
included in the Advance Facility) in accordance with the documentation
establishing the Advance Facility to such Advancing Person or to a trustee,
agent or custodian (an "Advance Facility Trustee") designated by such Advancing
Person. Notwithstanding anything to the contrary herein, in no event shall
Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts be
included in the "Available Funds" or distributed to Certificateholders.
Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Master Servicer would be permitted to reimburse itself in accordance
with this Agreement, assuming the Master Servicer had made the related
Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing, no Person
shall be entitled to reimbursement from funds held in the Collection Account for
future distribution to Certificateholders pursuant to this Agreement. None of
the Depositor or the Trustee shall have any duty or liability with respect to
the calculation or payment of any Reimbursement Amount, nor shall the Depositor
or the Trustee have any responsibility to track or monitor the administration of
the Advance Facility or the payment of Reimbursement Amounts to the related
Advancing Person or Advance Facility Trustee. The Master 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 Advancing 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.
An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first in, first out"
(FIFO) basis. Such documentation shall also require the Master Servicer to
provide to the related Advancing Person or Advance Facility Trustee loan by loan
information with respect to each Reimbursement Amount distributed to such
Advancing Person or Advance Facility Trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan. The
Master Servicer shall remain entitled to be reimbursed by the Advancing Person
or Advance Facility Trustee for all Advances and Servicing Advances funded by
the Master Servicer to the extent the related rights to be reimbursed therefor
have not been assigned or pledged to an Advancing Person.
The Master Servicer shall indemnify the Depositor, the Trustee, any
successor servicer and the Trust Fund resulting from any claim by the related
Advancing Person, except to the extent that such claim, loss, liability or
damage resulted from or arose out of negligence, recklessness or willful
misconduct on the part of the Depositor, the Trustee or any successor servicer.
Any amendment to this Section 6.05(b) 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(b), including
amendments to add provisions relating to a successor servicer, may be entered
into by the Trustee, the Depositor and the Master 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 Master Servicer.
Prior to entering into an Advance Facility, the Master Servicer shall notify the
lender under such facility in writing that: (a) the Advances and/or Servicing
Advances financed by and/or pledged to the lender are obligations owed to the
Master Servicer on a non-recourse basis 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 otherwise obligated or liable to repay any Advances and/or
Servicing Advances financed by the lender; (b) the Master Servicer will be
responsible for remitting to the lender the applicable amounts collected by it
as reimbursement for Advances and/or Servicing Advances funded by the lender,
subject to the restrictions and priorities created in this Agreement; and (c)
the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Master Servicer and the
lender.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
(a) If any one of the following events ("Servicer Events of
Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any Advance; or
(B) any other failure by the Master Servicer to deposit in the Collection
Account or Distribution Account any deposit required to be made under the
terms of this Agreement, which failure continues unremedied for a period
of one Business Day; or
(ii) The failure by the Master Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30
days, or the failure by the Master Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements of
the Master 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 Master 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 Master
Servicer; or
(iii) The entry against the Master 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 Master 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 Master
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 Master Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or
the Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(v) As of any Distribution Date, if the average for the related
Collection Period and the two preceding Collection Periods of the
fraction, expressed as a percentage, the numerator of which is (a) the sum
(without duplication) of the aggregate Principal Balance of 60+ Day
Delinquent Loans and the denominator of which is (b) the aggregate
Principal Balance of the Mortgage Loans, in the case of both (a) and (b),
as of the last day of each such Collection Period, exceeds 18%.
(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 Master 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 Master Servicer (and to the Trustee
if given by Holders of Certificates), terminate all of the rights and
obligations of the Master Servicer as servicer under this Agreement. Any such
notice to the Master Servicer shall also be given to each Rating Agency and the
Depositor. On or after the receipt by the Master Servicer (and by the Trustee if
such notice is given by the Holders) of such written notice, all authority and
power of the Master Servicer under this Agreement, whether with respect to the
Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section or successor servicer appointed
in connection with Section 7.02; and, without limitation, the Trustee or
successor servicer is hereby authorized and empowered to execute and deliver, on
behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and Related Documents or otherwise. The Master Servicer agrees to cooperate
with the Trustee (or the applicable successor servicer) in effecting the
termination of the responsibilities and rights of the Master Servicer hereunder,
including, without limitation, the delivery to the Trustee (or the applicable
successor servicer) of all documents and records requested by it to enable it to
assume the Master 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
Master Servicer and to be deposited by it in the Collection Account, the
Distribution Account or any Escrow Account or that have been deposited by the
Master Servicer in such accounts or thereafter received by the Master Servicer
with respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All reasonable out-of-pocket 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 Master
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.
Notwithstanding any termination of the activities of a Master
Servicer hereunder, the Master Servicer shall be entitled to receive payment of
all accrued and unpaid Servicing Fees and reimbursement for all outstanding
Advances and Servicing Advances properly made prior to the date of termination.
Section 7.02 Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Master 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 Master 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
Master 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 Master 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 Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master 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 Master 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 Master 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, including costs and expenses of the Trustee. 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
Master 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.
(b) Any successor, including the Trustee, to the Master 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 Master Servicer hereunder and
a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults.
The Holders of Certificates entitled to at least 66 2/3% of the
Voting Rights allocated to the Classes of Certificates affected by a Servicer
Event of Termination may, on behalf of all Certificateholders, waive any events
permitting removal of the Master 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 Master
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 Master Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master 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 Master 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 of
which a Responsible Officer of the Trustee shall have actual knowledge,
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 Master Servicer to comply with the obligations of the Master
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 Corporate Trust Office obtains actual knowledge of such failure or
the Trustee receives written notice of such failure from the Master
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 Master 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 Master Servicer in accordance
with the terms of this Agreement.
The Trustee shall not have any duty (A) to see any recording,
filing, or depositing of this Agreement or any agreement referred to herein or
any financing statement or continuation statement evidencing a security
interest, or to see to the maintenance of any such recording or filing or
depositing or to any rerecording, refiling or redepositing of any thereof, (B)
to see to any insurance or (C) to see to the payment or discharge of any tax,
assessment, or other governmental charge or any lien or encumbrance of any kind
owing with respect to, assessed or levied against, any part of the Trust Fund
other than from funds available in the Distribution Account.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be protected in
acting or refraining from acting upon, any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document reasonably believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(iii) the Trustee shall not be under any obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; the
right of the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act;
(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 Certificateholders; 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 Master Servicer or, if paid by
the Trustee, shall be reimbursed by the Master Servicer upon demand.
Nothing in this clause (v) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, have any liability or
make any representation as to any acts or omissions hereunder of the
Master Servicer until such time as the Trustee may be required to act as
Master Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed by it with due care; and
(viii) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than
the authentication of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature 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 Master Servicer, or for the use or application of any
funds paid to the Master Servicer in respect of the Mortgage Loans or deposited
in or withdrawn from the Collection Account by the Master 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 Master Servicer pursuant to Section 7.02); the validity
of the assignment of any Mortgage Loan to the Trustee or of any intervening
assignment; the completeness of any Mortgage Loan; the performance or
enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); the compliance by the
Depositor or the Master Servicer with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation prior to the Trustee's 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 Master 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 Master Servicer (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02), or any Mortgagor; any action of
the Master Servicer (other than if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.02), taken in the name of the Trustee; the
failure of the Master Servicer to act or perform any duties required of it as
agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); provided, however, that
the foregoing shall not relieve the Trustee 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 Master
Servicer, the Depositor or their Affiliates.
Section 8.05 Trustee Fees and Expenses.
The Trustee shall be entitled to the Trustee Fee (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 the Trustee in the exercise and
performance of any of the powers and duties hereunder. The Trustee shall
withdraw from the Distribution Account on each Distribution Date and pay to
itself the Trustee Fee. The Trust shall reimburse the Trustee 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 its negligence or bad faith or which is the
responsibility of Certificateholders or the Trustee hereunder. In addition, the
Trustee and its officers, directors, employees and agents shall be indemnified
by the Trust from, and held harmless against, any and all losses, liabilities,
damages, claims or expenses 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 willful misfeasance, bad faith or negligence of
the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. 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 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 Master
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and having accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of their property shall be appointed, or any public
officer shall take charge or control of the Trustee or of their property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee. If the Depositor or the Master 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 Master 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
Master 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 Master 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
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 Master Servicer and the Trustee may consider necessary
or desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Master 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.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder
or as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a 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 Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
Section 8.11 Limitation of Liability.
The Certificates are executed by the 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 Depositor, the Master 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 Master Servicer, the
Depositor and such Certificateholder and shall make available to the Master
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 Depositor,
the Master 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
Master Servicer hereunder shall occur and be continuing, the Trustee may proceed
to protect and enforce its rights and the rights of the Certificateholders under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 8.14 Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
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 Q, REMIC A, REMIC B, REMIC 1, REMIC 2, REMIC 3 and REMIC 4 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 Trustee 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 Trustee in fulfilling its duties hereunder. The Trustee 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 Class R Certificate shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person") with
respect to a REMIC, 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 the Class R
Certificate to any disqualified person or organization and (ii) to the
Certificateholders such information or reports as are required by the Code or
REMIC Provisions.
(f) The Trustee, the Master Servicer, and the Holders of
Certificates shall take any action or cause any REMIC formed under this
Agreement to take any action necessary to create or maintain the status of such
REMIC as a REMIC under the REMIC Provisions and shall assist each other as
necessary to create or maintain such status. None of the Trustee, the Master
Servicer or the Holder of the Class R Certificate shall take any action or cause
any REMIC formed under this Agreement to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if taken
or not taken, as the case may be, could (i) endanger the status of such REMIC as
a REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the Master Servicer have received an Opinion of Counsel (at the expense of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC formed under
this Agreement or the assets therein, or causing such REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, any Holder
of the Class R Certificate will consult with the Trustee and the Master
Servicer, or their respective designees, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to such
REMIC, and no such Person shall take any such action or cause such REMIC to take
any such action as to which the Trustee or the Master Servicer has advised it in
writing that an Adverse REMIC Event could occur.
(g) The Holder of the Class R Certificate shall pay when due any and
all taxes imposed on any REMIC formed under this Agreement by federal or state
governmental authorities, but only from amounts, if any, distributable thereon.
To the extent that such REMIC taxes are not paid by the Class R
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of future
amounts otherwise distributable to the Holder of the Class R Certificate or, if
no such amounts are available, out of other amounts held in the Distribution
Account, and shall reduce amounts otherwise payable to Holders of the REMIC
Regular Interests or the Certificates, as the case may be.
(h) The Trustee, shall, for federal income tax purposes, maintain or
cause to be maintained books and records with respect to each REMIC formed under
this Agreement on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 2003,
the Trustee shall deliver to each Rating Agency an Officer's Certificate stating
the Trustee's compliance with the provisions of this Section 9.01.
(l) The Trustee shall treat (i) the rights of the Offered P&I
Certificates to receive Cap Carryover Amounts as a right in interest rate cap
contracts written by the Class CE Certificateholders in favor of the Holders of
the Offered P&I Certificates, (ii) the rights and obligations of the Class A-2
Certificates under the Swap Agreement in accordance with the terms of thereof
and (iii) the rights of the Class CE Certificates 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. 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. The provisions of this
paragraph are intended to satisfy the requirements of Treasury Regulations
Section 1.860G-2(i) for the treatment of property rights coupled with regular
interests to be separately respected and shall be interpreted consistent with
such regulation. On each Distribution Date, to the extent the Offered
Certificates receive interest in excess of the Class A-1 REMIC Pass-Through
Rate, Class A-2 REMIC Pass-Through Rate, Class M-1 REMIC Pass-Through Rate,
Class M-2 REMIC Pass-Through Rate, Class M-3 REMIC Pass-Through Rate, Class M-4
REMIC Pass-Through Rate, Class M-5 REMIC Pass-Through Rate, Class M-6 REMIC
Pass-Through Rate and Class B REMIC Pass-Through Rate, as applicable, such
interest will be treated as distributed on the REMIC 4 Components, pro rata,
beneficially owned by the Class CE Certificates, together with any amount
deposited in the Reserve Account in respect of the Yield Maintenance Agreement,
and then paid to the respective Classes of Offered P&I Certificates pursuant to
the related interest rate cap agreement.
Section 9.02 Prohibited Transactions and Activities.
None of the Depositor, the Master Servicer or the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in 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, (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement or (vi) an optional purchase by the Master Servicer pursuant to
Section 3.16 of this Agreement, nor acquire any assets for any REMIC, nor sell
or dispose of any investments in the Distribution Account for gain, nor accept
any contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale, disposition,
or substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of such REMIC as a REMIC or of the
interests therein other than the Class R Certificate as the regular interests
therein, (b) affect the distribution of interest or principal on the
Certificates, (c) result in the encumbrance of the assets transferred or
assigned to the Trust Fund (except pursuant to the provisions of this Agreement)
or (d) cause such REMIC to be subject to a tax on prohibited transactions or
prohibited contributions pursuant to the REMIC Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and Loss
of REMIC Status.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the Holder
of the Class R Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Master Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of the Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of the Class R Certificate
on which the Master Servicer has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of the Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Master Servicer have any liability (1)
for any action or omission that is taken in accordance with and in compliance
with the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Master Servicer of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
Section 9.04 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 Master Servicer, acting on behalf of the Trust hereunder, shall
not rent, lease, or otherwise earn income on behalf of any REMIC 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 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 Master Servicer has advised, or has caused the applicable Master 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 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 Master Servicer shall make reasonable efforts to sell any
REO Property for its fair market value. In any event, however, the Master
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 Master 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 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 Master
Servicer has received such an extension, then the Master Servicer shall continue
to attempt to sell the REO Property for its fair market value as determined in
good faith by the Master Servicer for such longer period as such extension
permits (the "Extended Period"). If the Master Servicer has not received such an
extension and the Master Servicer is unable to sell the REO Property within 33
months after its acquisition by the Trust Fund or if the Master Servicer has
received such an extension, and the Master Servicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Master 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 Master Servicer or (ii) auction the REO
Property to the highest bidder (which may be the Master 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 REMIC 4 Regular Interests, the right of the Class P Certificates to receive
Prepayment Charges and Servicer Prepayment Charge Payment Amounts, the rights
and obligations of the Class A-2 Certificates under the Swap Agreement, the
right of the Offered P&I Certificates to receive Cap Carryover Amounts, the
Reserve Account and the right of the Class CE Certificates to receive Yield
Maintenance Agreement Payments subject to the obligation of the Class CE
Certificates to pay Cap Carryover Amounts, shall be treated as a "grantor trust"
under the Code, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall furnish or
cause to be furnished (i) to the Holders of the Offered P&I Certificates and
(ii) to the Holder of the Class CE Certificates and shall file or cause to be
filed with the Internal Revenue Service together with Form 1041 or such other
form as may be applicable, their allocable shares of income and expenses with
respect to the property held by the Grantor Trust, at the time or times and in
the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination.
(a) The respective obligations and responsibilities of the Master
Servicer, the Depositor, the 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
Master Servicer to send certain notices as hereinafter set forth) shall
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balance of each Class of Certificates
has been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, and (iii) the optional purchase by the Majority
Class CE Certificateholders or the Master 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 Majority Class CE Certificateholders may, at their option,
terminate the Trust Fund and retire the Offered Certificates on the next
succeeding Distribution Date upon which the aggregate current Pool Balance is
less than 10% of the aggregate Pool Balance of the Mortgage Loans as of the
Cut-off Date by purchasing all of the outstanding (i) Mortgage Loans in the
Trust Fund at a price equal to the sum of the outstanding Principal Balance of
the Mortgage Loans and except to the extent previously advanced by the Master
Servicer, accrued and unpaid interest thereon at the weighted average of the
Mortgage Interest Rates through the end of the Collection Period preceding the
final Distribution Date plus unreimbursed Servicing Advances, Advances and any
unpaid Servicing Fees allocable to such Mortgage Loans and (ii) REO Properties
in the Trust Fund at a price equal to their fair market value as determined in
good faith by the Master Servicer (the "Termination Price"). If such option is
not exercised by the Majority Class CE Certificateholders on the first
applicable Distribution Date, the Master Servicer may exercise such option, but
only upon providing at least sixty days prior written notice to the Majority
Class CE Certificateholders and the Seller of the Master Servicer's intention to
terminate the Trust Fund and the applicable Distribution Date for such
termination. Upon receipt of such notice, the Majority Class CE
Certificateholders may exercise their option to terminate the Trust Fund on or
before the Distribution Date selected by the Master Servicer in accordance with
the procedures set forth in this Section 10.01.
In connection with any such purchase pursuant to the preceding
paragraph, the Master 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 Master 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 on the
Determination Date before such Distribution Date of the Termination Price to the
Trustee for deposit into the Distribution Account as part of Available Funds.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the 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 Majority
Class CE Certificateholders or the Master Servicer, as applicable, by letter to
the Certificateholders mailed not earlier than the 15th day of the month
preceding the month of such final distribution and not later than the 15th day
of the month of such final distribution specifying (1) the Distribution Date
upon which final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the Trustee
therein designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Sections 4.01 and 4.02 for
such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if the Master
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 Certificateholder shall be entitled to all unclaimed
funds and other assets which remain subject hereto (except with respect to the
Class B, Class CE and Class P Certificates) and the Trustee upon transfer of
such funds shall be discharged of any responsibility for such funds, and all
other Certificateholders shall look to the Class R Certificateholder for
payment.
Section 10.02 Additional Termination Requirements.
(a) In the event that the Majority Class CE Certificateholders or
Master 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 Q, REMIC A, REMIC B, REMIC 1, REMIC 2, REMIC
3 and REMIC 4 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 Majority Class CE
Certificateholders or the Master Servicer, as applicable, for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the 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 A-1 and Class A-2 Certificates, pro rata and
(ii) to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-4, Class
M-6 and Class B Certificates, the related Certificate Principal Balance,
as applicable, plus one month's interest thereon at the applicable
Pass-Through Rate, (B) to the Class CE Certificates, 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
Certificateholder, all cash on hand in respect of the REMICs after such
payment (other than cash retained to meet claims) and the Trust shall
terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity or mistake, (ii) to correct,
modify or supplement any provision herein which may be inconsistent with any
other provision herein or the Prospectus Supplement, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement,
which shall not be inconsistent with the provisions of this Agreement; or (iv)
to comply with any requirements imposed by the Code; provided, however, that any
such action listed in clause (iii) above shall not adversely affect in any
respect the interests of any Certificateholder, as evidenced by (i) notice in
writing to the Depositor, the Master Servicer and the Trustee from the Rating
Agencies that such action will not result in the reduction or withdrawal of the
rating of any outstanding Class of Certificates with respect to which it is a
Rating Agency, or (ii) an Opinion of Counsel delivered to the Master Servicer
and the Trustee.
In addition, this Agreement may be amended from time to time by the
Depositor, the Master 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 majority of the Percentage Interest in such Class,
or (z) reduce the percentage of Voting Rights required by clause (y) above
without the consent of the Holders of all Certificates of such Class then
outstanding. Upon approval of an amendment, a copy of such amendment shall be
sent to the Rating Agencies. Prior to the execution of any amendment to this
Agreement, the Trustee 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 Fund 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 Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the 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
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05 Notices.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to (a) in
the case of the Trustee, Xxxxx Fargo Bank Minnesota, N.A., X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Manager - ABFC Asset-Backed
Certificates, Series 2002-OPT1 with a copy to: (i) Xxxxx Fargo Bank Minnesota,
N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: ABFC
Asset-Backed Certificates, Series 2002-OPT1 and (ii) Xxxxx Fargo Bank Minnesota,
N.A., Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: ABFC Asset-Backed Certificates, Series 2002-OPT1, or such other
address as may hereafter be furnished to the Depositor and the Master Servicer
in writing by the Trustee, (b) in the case of the Depositor, Asset Backed
Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: ABFC Asset-Backed Certificates, Series 2002-OPT1, or
such other address as may be furnished to the Master Servicer and the Trustee in
writing by the Depositor, and (c) in the case of the Master Servicer, Option One
Mortgage Corporation, 3 Ada, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx,
Facsimile: (000) 000-0000, or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing. 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 Master 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 Master 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 Master 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 Master 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 Master 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: Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Managing
Director, Residential Mortgage-Backed Securities; Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Attention: Managing
Director, Residential Mortgage-Backed Securities; and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Surveillance Group.
Section 11.09 Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.
Section 11.10 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 11.11 Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee and the Master
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
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.
Section 11.12 Assumption of Auction Administration Agreement and
Swap Agreement.
In the event the Trustee for any reason shall be unable to act as
Auction Administrator, the Depositor shall thereupon appoint a successor, to the
appointment of which the Depositor shall have received Bank of America, N.A.'s
prior written consent (which consent shall not be unreasonably withheld) and
such successor shall be the "Auction Administrator" for all purposes of this
Agreement. The successor Auction Administrator appointed by the Depositor
hereunder shall be deemed to have assumed all of the predecessor Auction
Administrator's interest therein to the same extent as if such Auction
Administration Agreement and Swap Agreement had been assigned to the assuming
party.
In the event of the appointment of a successor Auction
Administrator, the predecessor Auction Administrator shall, upon request of the
Depositor, deliver to the assuming party all documents and records relating to
the Auction Administration Agreement and the Swap Agreement and otherwise use
its best efforts to effect the orderly and efficient transfer of the Auction
Administration Agreement and the Swap Agreement to the assuming party.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION, as
Depositor
By:_____________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
OPTION ONE MORTGAGE CORPORATION,
as Master Servicer
By:_____________________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Name:
Title:
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 26th day of September, 2002 before me, a notary public in and
for said State, personally appeared Xxxxxxx X. Xxxxxxxxxx, known to me to be a
Senior Vice President of Asset Backed Funding Corporation, a Delaware
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF )
On the 26th day of September, 2002 before me, a notary public in and
for said State, personally appeared _____________________, known to me to be a
______________________ of Xxxxx Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said association, and
acknowledged to me that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF )
On the 26th day of September, 2002 before me, a notary public in and
for said State, personally appeared _____________________, known to me to be a
______________________ of Option One Mortgage Corporation, a California
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
EXHIBIT A-1
[FORM OF THE CLASS A-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS A-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class A-1 Original Class Certificate Principal
Balance of the Class A-1 Certificates
Pass-Through Rate: Floating as of the Closing Date:
$391,222,000.00
Date of Pooling and Servicing
Agreement and Cut-off Date: September Initial Certificate Principal Balance:
1, 2002 $[ ]
First Distribution Date: October 25, Master Servicer: Option One Mortgage
2002 Corporation
No. Trustee: Xxxxx Fargo Bank Minnesota,
National Association
CUSIP: 04542B BG 6
Closing Date: September 26, 2002
ISIN: US04542BBG68
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-1 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-1 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Class A-1 Pass-Through Rate for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class A-1 Certificate Margin and (ii) the Group 1 Maximum Rate Cap.
Interest will accrue on the Class A-1 Certificates during each Interest Accrual
Period at a rate equal to the lesser of (i) the Class A-1 Pass-Through Rate and
(ii) the Group 1 Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-1 Certificates.
The Class A-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ___________________________________________, as its
agent.
EXHIBIT A-2
[FORM OF THE CLASS A-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS A-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class A-2 Original Class Certificate Principal
Balance of the Class A-2 Certificates
Pass-Through Rate: Fixed/Floating as of the Closing Date:
$125,860,000.00
Date of Pooling and Servicing
Agreement and Cut-off Date: September Initial Certificate Principal Balance:
1, 2002 $[ ]
First Distribution Date: October 25, Master Servicer: Option One Mortgage
2002 Corporation
No. Trustee: Xxxxx Fargo Bank Minnesota,
National Association
CUSIP: 04542B BH 4
Closing Date: September 26, 2002
ISIN: US04542BBH42
PURSUANT TO THE AUCTION ADMINISTRATION AGREEMENT AND THE SWAP AGREEMENT
(EACH AS DEFINED IN THE AGREEMENT), IF DEFINITIVE CERTIFICATES HAVE BEEN
ISSUED FOR THIS CLASS, THE HOLDER OF THIS CERTIFICATE WILL BE REQUIRED TO
SURRENDER THIS CERTIFICATE PRIOR TO THE DISTRIBUTION DATE IN SEPTEMBER
2004 TO THE CERTIFICATE REGISTRAR FOR REGISTRATION OF TRANSFER TO A
THIRD-PARTY INVESTOR, AND IN EXCHANGE THEREFOR THE HOLDER OF THIS
CERTIFICATE WILL RECEIVE, TO THE EXTENT RECEIVED PURSUANT TO THE AUCTION
ADMINISTRATION AGREEMENT AND THE SWAP AGREEMENT, THE PAR PRICE (AS DEFINED
IN THE AGREEMENT) FOR THIS CERTIFICATE.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class A-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class A-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
A-2 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class A-2 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class A-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
The Class A-2 Pass-Through Rate for each Distribution Date (a) prior
to or on the Distribution Date in September 2004, will be a per annum rate equal
to 2.734% and (b) after the Distribution Date in September 2004, will be the
lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date, plus
the Class A-2 Certificate Margin and (ii) the Group 2 Maximum Rate Cap. Interest
will accrue on the Class A-2 Certificates during each Interest Accrual Period at
a rate equal to the lesser of (i) the Class A-2 Pass-Through Rate and (ii) the
Group 2 Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class A-2 Certificates.
The Class A-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-IO
[FORM OF CLASS AIO 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").
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS AIO
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class AIO Original Notional Amount as of the
Closing Date: $63,837,000.00
Pass-Through Rate: Step Coupon
Initial Notional Amount: $[ ]
Date of Pooling and Servicing
Agreement and Cut-off Date: September Master Servicer: Option One Mortgage
1, 2002 Corporation
First Distribution Date: October 25, Trustee: Xxxxx Fargo Bank Minnesota,
2002 National Association
No. Closing Date: September 26, 2002
CUSIP: 04542B BJ 0
ISIN: US04542BBJ08
THE NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE REDUCED IN THE MANNER
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT. ACCORDINGLY, THE
OUTSTANDING NOTIONAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL NOTIONAL AMOUNT REPRESENTED HEREBY.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER 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 Notional Amount of this
Certificate by the Original Notional Amount) in that certain beneficial
ownership interest evidenced by all the Class AIO Certificates in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Asset Backed Funding Corporation (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
the Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AIO Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class AIO
Certificates the aggregate Initial 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 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 AIO Pass-Through Rate on each Distribution Date will be
(i) through and including the Distribution Date in July 2003, 6.00% per annum,
(ii) from and including the Distribution Date in August 2003 through and
including the Distribution Date in May 2004, 4.50% per annum, (iii) from and
including the Distribution Date in June 2004 through and including the
Distribution Date in March 2005, 2.50% per annum, and (iv) after the
Distribution Date in March 2005, 0%.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class AIO Certificates.
The Class AIO 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class AIO Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-IO-INV
[FORM OF CLASS AIO-INV 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").
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS AIO-INV
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class AIO-INV Original Notional Amount as of the
Closing Date: $482,990,905.00
Pass-Through Rate: Inverse Floating
Initial Notional Amount: $[ ]
Date of Pooling and Servicing
Agreement and Cut-off Date: September Master Servicer: Option One Mortgage
1, 2002 Corporation
First Distribution Date: October 25, Trustee: Xxxxx Fargo Bank Minnesota,
2002 National Association
No. Closing Date: September 26, 2002
CUSIP: 04542B BK 7
ISIN: US04542BBK70
THE NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE REDUCED IN THE MANNER
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT. ACCORDINGLY, THE
OUTSTANDING NOTIONAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS
THAN THE INITIAL NOTIONAL AMOUNT REPRESENTED HEREBY.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER 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 Notional Amount of this
Certificate by the Original Notional Amount) in that certain beneficial
ownership interest evidenced by all the Class AIO-INV Certificates in the Trust
Fund created pursuant to a Pooling and Servicing Agreement, dated as specified
above (the "Agreement"), among Asset Backed Funding Corporation (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Master Servicer and the Trustee, a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class AIO-INV Certificates on such
Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class AIO-INV
Certificates the aggregate Initial 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 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 AIO-INV Pass-Through Rate on each Distribution Date will
be a per annum rate equal to the greater of (i) 1.75% minus One-Month LIBOR and
(ii) 0.00%. Interest will accrue on the Class AIO-INV Certificates during each
Interest Accrual Period at a rate equal to the Class AIO-INV Pass-Through Rate
for such Distribution Date
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class AIO-INV Certificates.
The Class AIO-INV 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class AIO-INV Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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
[FORM OF CLASS B CERTIFICATE]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND CLASS M-6 CERTIFICATES
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED 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 MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
EXCEPT AS PROVIDED IN SECTION 5.02(d) OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN, THIS CERTIFICATE MAY NOT BE PURCHASED BY OR
TRANSFERRED TO ANY PERSON THAT HAS NOT DELIVERED A REPRESENTATION LETTER
STATING EITHER (A) THAT THE TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), 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 POOLING AND SERVICING AGREEMENT, THAT
THE SOURCE OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS AN "INSURANCE
COMPANY GENERAL ACCOUNT." THE POOLING AND SERVICING AGREEMENT PROVIDES
THAT ANY ATTEMPTED OR PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER
RESTRICTIONS WILL BE NULL AND VOID AND WILL VEST NO RIGHTS IN ANY
PURPORTED TRANSFEREE.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS B
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class B Original Class Certificate Principal
Balance of the Class B Certificates as
Pass-Through Rate: Fixed of the Closing Date: $6,383,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B CB 6 Closing Date: September 26, 2002
ISIN: US04542BCB62
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE 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 Certificates) in that certain beneficial ownership interest
evidenced by all the Class B Certificates in the Trust Fund created pursuant to
a Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Asset Backed Funding Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class B
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 Class B Pass-Through Rate for each Distribution Date will be
7.50% per annum. Interest will accrue on the Class B Certificates during each
Interest Accrual Period at a rate equal to the lesser of (i) the Class B
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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class B Certificates.
The Class B 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 M-4, Class M-5 and Class M-6 Certificates
as described in the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee 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 any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________,
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to ______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ___________________________________________, as its
agent.
EXHIBIT C-1
[FORM OF CLASS 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 SEVEN SEPARATE "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN
SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1
OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX,
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING
TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL
BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02(d) OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS
PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R
CERTIFICATE.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS R
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class R Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing
Agreement and Cut-off Date: September Trustee: Xxxxx Fargo Bank Minnesota,
1, 2002 National Association
First Distribution Date: October 25, Closing Date: September 26, 2002
2002
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER 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 100% Percentage Interest in that certain beneficial ownership interest
evidenced by the Class R Certificate in the Trust Fund created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Asset Backed Funding Corporation (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in the amount required to be
distributed to the Holder of Class R Certificate on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class R
Certificate, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class R Certificate is limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee 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 any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest therein may be made
to employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed for all purposes to have consented to the provisions of Section 5.02 of
the Agreement and to any amendment of the Agreement deemed necessary by counsel
of the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause the Trust
to cease to qualify as seven separate REMICs or cause the imposition of a tax
upon the Trust.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is the Class R Certificates referred to in the within-mentioned
Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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 POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-1 Original Class Certificate Principal
Balance of the Class M-1 Certificates
Pass-Through Rate: Floating as of the Closing Date: $41,495,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BL 5 Closing Date: September 26, 2002
ISIN: US04542BBL53
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-1 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-1 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer 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 immediately
prior to such Distribution Date and is the registered owner of Class M-1
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-1 Certificate Margin and (ii) the Pool Maximum Rate Cap.
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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-1 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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 POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-2 Original Class Certificate Principal
Balance of the Class M-2 Certificates
Pass-Through Rate: Floating as of the Closing Date: $12,767,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BM 3 Closing Date: September 26, 2002
ISIN: US04542BBM37
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-2 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-2 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer 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 immediately
prior to such Distribution Date and is the registered owner of Class M-2
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-2 Certificate Margin and (ii) the Pool Maximum Rate Cap.
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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the Class A
Certificates and Class M-1 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-2 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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 POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-3 Original Class Certificate Principal
Balance of the Class M-3 Certificates
Pass-Through Rate: Floating as of the Closing Date: $23,939,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BN 1 Closing Date: September 26, 2002
ISIN: US04542BBN10
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-3 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-3 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer 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 immediately
prior to such Distribution Date and is the registered owner of Class M-3
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-3 Certificate Margin and (ii) the Pool Maximum Rate Cap.
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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-3 Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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, Class M-1 Certificate and Class M-2 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-3 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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 M-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 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-4
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-4 Original Class Certificate Principal
Balance of the Class M-4 Certificates
Pass-Through Rate: Floating as of the Closing Date: $19,151,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BP 6 Closing Date: September 26, 2002
ISIN: US04542BBP67
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-4 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-4 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-4 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-4 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-4
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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-4 Pass-Through Rate for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-4 Certificate Margin and (ii) the Pool Maximum Rate Cap.
Interest will accrue on the Class M-4 Certificates during each Interest Accrual
Period at a rate equal to the lesser of (i) the Class M-4 Pass-Through Rate and
(ii) the Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-4 Certificates.
The Class M-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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, Class M-1 Certificate, Class M-2 Certificates and Class M-3
Certificates as described in the Pooling and Servicing Agreement referred to
herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-4 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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 M-5 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M-1, CLASS M-2, CLASS M-3 AND CLASS M-4 CERTIFICATES AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-5
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-5 Original Class Certificate Principal
Balance of the Class M-5 Certificates
Pass-Through Rate: Floating as of the Closing Date: $9,576,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BQ 4 Closing Date: September 26, 2002
ISIN: US04542BBQ41
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-5 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-5 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-5 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-5 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-5
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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-5 Pass-Through Rate for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-5 Certificate Margin and (ii) the Pool Maximum Rate Cap.
Interest will accrue on the Class M-5 Certificates during each Interest Accrual
Period at a rate equal to the lesser of (i) the Class M-5 Pass-Through Rate and
(ii) the Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-5 Certificates.
The Class M-5 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates and Class M-4 Certificates as described in the Pooling and
Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-5 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-7
[FORM OF CLASS M-6 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
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 M-4 AND CLASS M-5 CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE") AND CERTAIN OTHER PROPERTY.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS M-6
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class M-6 Original Class Certificate Principal
Balance of the Class M-6 Certificates
Pass-Through Rate: Floating as of the Closing Date: $4,788,000.00
Date of Pooling and Servicing Initial Certificate Principal Balance:
Agreement and Cut-off Date: September $[ ]
1, 2002
Master Servicer: Option One Mortgage
First Distribution Date: October 25, Corporation
2002
Trustee: Xxxxx Fargo Bank Minnesota,
No. National Association
CUSIP: 04542B BR 2 Closing Date: September 26, 2002
ISIN: US04542BBR24
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER SERVICER, THE TRUSTEE OR ANY OF
THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _________________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Certificate Principal
Balance of this Certificate by the Original Class Certificate Principal Balance
of the Class M-6 Certificates) in that certain beneficial ownership interest
evidenced by all the Class M-6 Certificates in the Trust Fund created pursuant
to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Asset Backed Funding Corporation (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Business Day immediately preceding such
Distribution Date (the "Record Date"), from funds in the Distribution Account in
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of Class
M-6 Certificates on such Distribution Date pursuant to the Agreement; provided,
however, that if any Class M-6 Certificate becomes a Definitive Certificate, the
Record Date for such Certificate will be the last Business Day of the month
immediately preceding the month in which the related Distribution Date occurs.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class M-6
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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-6 Pass-Through Rate for each Distribution Date will be
the lesser of (i) One-Month LIBOR as of the related LIBOR Determination Date,
plus the Class M-6 Certificate Margin and (ii) the Pool Maximum Rate Cap.
Interest will accrue on the Class M-6 Certificates during each Interest Accrual
Period at a rate equal to the lesser of (i) the Class M-6 Pass-Through Rate and
(ii) the Pool Cap for such Distribution Date.
This Certificate is one of a duly authorized issue of Certificates
designated as ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing a Percentage Interest
in the Class M-6 Certificates.
The Class M-6 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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, Class M-1 Certificate, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates and Class M-5 Certificates as described in
the Pooling and Servicing Agreement referred to herein.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-6 Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-8
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS CE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class CE Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing
Agreement and Cut-off Date: September Trustee: Xxxxx Fargo Bank Minnesota,
1, 2002 National Association
First Distribution Date: October 25, Closing Date: September 26, 2002
2002
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER 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 CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from funds in the Distribution Account in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class CE
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 ABFC Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.
The Class CE Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee 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 any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the 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 Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assume 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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class CE Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-9
[FORM OF CLASS P CERTIFICATE]
THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR ANY
MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW
WILL BE REGISTERED.
ABFC ASSET-BACKED CERTIFICATES
SERIES 2002-OPT1, CLASS P
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of conventional fixed-rate and adjustable-rate one- to four-family
first lien mortgage loans formed and sold by
ASSET BACKED FUNDING CORPORATION
Series 2002-OPT1, Class P Master Servicer: Option One Mortgage
Corporation
Date of Pooling and Servicing
Agreement and Cut-off Date: September Trustee: Xxxxx Fargo Bank Minnesota,
1, 2002 National Association
First Distribution Date: October 25, Closing Date: September 26, 2002
2002
No.
Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN ASSET
BACKED FUNDING CORPORATION, THE MASTER 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 P Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Asset Backed Funding Corporation
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs (the "Record
Date"), from Prepayment Charges and Servicer Prepayment Charge Payment Amounts
in the Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class P Certificates on such Distribution Date pursuant to the
Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Certificate Registrar
in writing at least five Business Days prior to the Record Date immediately
prior to such Distribution Date and is the registered owner of Class P
Certificates, or by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the 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 ABFC Asset-Backed Certificates of the Series specified on the face
hereof (herein called the "Certificates") and representing the Percentage
Interest specified on the face hereof.
The Class P Certificates are limited in right of payment to
Prepayment Charges received on the Mortgage Loans and Servicer Prepayment Charge
Payment Amounts, all as more specifically set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Collection 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 Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Rights identified in the agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the 1933 Act and
effective registration or qualification under applicable state securities laws,
or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification, the Certificate Registrar shall require, in order to assure
compliance with such laws, either (i) that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
execute a representation letter in the form described by the Agreement
certifying to the Certificate Registrar the facts surrounding the transfer, or
(ii) unless such transfer is made in reliance upon Rule 144A under the 1933 Act,
that the Depositor and the Certificate Registrar receive an Opinion of Counsel
satisfactory to them that such transfer may be made without such registration or
qualification, which Opinion of Counsel shall not be an expense of the
Depositor, the Trustee 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 any Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA, Section 4975 of the Code or any materially similar
provisions of applicable federal, state or local law (collectively, "Plans") or
any person who is directly or indirectly purchasing the Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan.
No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar or any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.
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:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the
within-mentioned Agreement.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Certificate
Registrar
By:_____________________________________
Authorized Signatory
Date of authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right ____________________
of survivorship and not as (State)
tenants in common
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-1
GROUP 1 MORTGAGE LOAN SCHEDULE
(INTENTIONALLY OMITTED)
EXHIBIT D-2
GROUP 2 MORTGAGE LOAN SCHEDULE
(INTENTIONALLY OMITTED)
EXHIBIT E
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - ABFC, Series 2002-OPT1
Re: Pooling and Servicing Agreement dated as of September 1, 2002 among
Asset Backed Funding Corporation, as depositor, Option One Mortgage
Corporation, as servicer, and Xxxxx Fargo Bank Minnesota, National
Association, as trustee
All capitalized terms used herein shall have the means ascribed to
them in the Pooling and Servicing Agreement (the "Agreement") referenced above.
In connection with the administration of the Mortgage Loans held by
you as Trustee pursuant to the Agreement, we request the release, and hereby
acknowledge receipt, of the Trustee's Mortgage File for the Mortgage Loan
described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason: __________________________
By:_______________________________
(authorized signer)
Issuer:___________________________
Address:__________________________
__________________________________
Date:_____________________________
Custodian
Xxxxx Fargo Bank Minnesota, National Association
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
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Option One Mortgage Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of September 1, 2002 among Asset Backed
Funding Corporation, as depositor, Option One Mortgage Corporation,
as servicer, and Xxxxx Fargo Bank Minnesota, National Association,
as trustee, with respect to ABFC Asset-Backed Certificates, Series
2002-OPT1.
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that it has received
the documents listed in Section 2.01 of the Pooling and Servicing Agreement for
each Mortgage File pertaining to each Mortgage Loan listed on Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement, subject to any exceptions noted on
Schedule I hereto and, based on an examination of such documents, the
information set forth in the Mortgage Loan Schedules that corresponds to items
(1), (2), (3), (6), (7), (8), (10) and (22) of the Mortgage Loan Schedules
accurately reflects the information in the Mortgage File.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Pooling and
Servicing Agreement. This Certificate is subject in all respects to the terms of
Section 2.02 of the Pooling and Servicing Agreement and the Pooling and
Servicing Agreement sections cross-referenced therein.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT F-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
[Date]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Option One Mortgage Corporation
3 Ada
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of September 1, 2002 among Asset Backed
Funding Corporation, as depositor, Option One Mortgage Corporation,
as servicer, and Xxxxx Fargo Bank Minnesota, National Association,
as trustee, with respect to ABFC Asset-Backed Certificates, Series
2002-OPT1
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 Schedules attached as Exhibits D-1 and
D-2 to the Pooling and Servicing Agreement (other than any Mortgage Loan paid in
full or listed on Schedule I hereto), it has received the applicable documents
listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedules, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the applicable documents listed in Section
2.01 of the Pooling and Servicing Agreement and has determined that each such
document appears to be complete and, based on an examination of such documents,
the information set forth in the Mortgage Loan Schedules 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.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT F-3
FORM OF RECEIPT OF MORTGAGE NOTE
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: ABFC Asset-Backed Certificates, Series 2002-OPT1
Ladies and Gentlemen:
Pursuant to Section 2.01 of the Pooling and Servicing Agreement,
dated as of September 1, 2002, among Asset Backed Funding Corporation, as
depositor, Option One Mortgage Corporation, as servicer, and Xxxxx Fargo Bank
Minnesota, National Association, as trustee, we hereby acknowledge the receipt
of the original Mortgage Note, or, with respect to any lost Mortgage Note, an
original Lost Note Affidavit, together with a copy of the related Mortgage Note
(a copy of which is attached hereto as Exhibit 1) with any exceptions thereto
listed on Exhibit 2.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT G
MORTGAGE LOAN PURCHASE AGREEMENT
(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 Xxxxx
Fargo Bank Minnesota, National Association, as trustee on behalf of ABFC
Asset-Backed Certificates, Series 2002-OPT1, to accept the transfer of the above
described loan from Seller.
Seller agrees to indemnify and hold harmless Xxxxx Fargo Bank
Minnesota, National Association and Asset Backed Funding Corporation for any
losses incurred by such parties resulting from the above described promissory
note has been lost or misplaced.
By:_____________________________________
________________________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in and
for said County and State, appeared ________________________, who acknowledged
the extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
My commission expires ________.
EXHIBIT I
FORM OF ERISA REPRESENTATION
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - ABFC, Series 2002-OPT1
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: ABFC Asset-Backed Certificates, Series 2002-OPT1
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"), Option One Mortgage Corporation, as
servicer, and Xxxxx Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"), no transfer of the ERISA-Restricted Certificates shall be permitted
to be made to any person unless the Depositor and the Certificate Registrar (as
defined in the Agreement) have received a certificate from such transferee in
the form hereof.
3. The Transferee either (x) (i) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or any materially similar provisions of
applicable federal, state or local law ("Similar Law"), the Trustee of any such
plan or a person acting on behalf of any such plan nor a person using the assets
of any such plan or (ii) (except in the case of the Class R, Class CE and Class
P Certificates) is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60") and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60 or (y) (except in the case of the Class R
Certificate) shall deliver to the Certificate Registrar and the Depositor an
opinion of counsel (a "Benefit Plan Opinion") satisfactory to the Certificate
Registrar, and upon which the Certificate Registrar and the Depositor shall be
entitled to rely, to the effect that the purchase or holding of such Certificate
by the Transferee will not result in the assets of the Trust Fund being deemed
to be plan assets and subject to the prohibited transaction provisions of ERISA
or the Code (or similar provisions of 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
00xx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - ABFC, Series 2002-OPT1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2002-OPT1 (the "Certificates"), we certify that (a) we
understand that the Certificates are not being registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an "accredited investor,"
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (d)
we are acquiring the Certificates for investment for our own account and not
with a view to any distribution of such Certificates (but without prejudice to
our right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (e) we agree that the Certificates must be
held indefinitely by us and we acknowledge that we are able to bear the economic
risk of investment in the Certificates, (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - ABFC, Series 2002-OPT1
Re: ABFC Asset-Backed Certificates, Series 2002-OPT1
Ladies and Gentlemen:
In connection with our acquisition of the ABFC Asset-Backed
Certificates, Series 2002-OPT1 (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
ABFC ASSET-BACKED CERTIFICATES, SERIES 2002-OPT1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is [an officer of] ____________________, the
proposed Transferee of an Ownership Interest in the Class R Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Asset Backed
Funding Corporation, as depositor, Option One Mortgage Corporation, as servicer,
and Xxxxx Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificates either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Disqualified Organization; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is not a Disqualified Organization and, at the time
of Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is not a Disqualified Organization and the
pass-through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass-through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a partnership,
trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02(d) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth in this Exhibit K to the Agreement (a "Transferor Certificate")
to the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is ____________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. That the Transferee will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other person.
12. That, if the Transferee is purchasing the Class R Certificate in
a transfer intended to meet the safe harbor provisions of Treasury Regulations
Sections 1.860E-1(c), the Transferee has executed and attached Attachment A
hereto.
13. The Transferee is not an employee benefit plan that is subject
to ERISA or a plan that is subject to Section 4975 of the Code or a plan or
arrangement subject to any materially similar provisions of applicable federal,
state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of __________________, 20__.
[NAME OF TRANSFEREE]
By:_____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named ____________ , known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________________ of the Transferee, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________ , 20__.
________________________________________
NOTARY PUBLIC
My Commission expires the ____ day of
________________, 20__.
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 Class R Certificate
equals or exceeds the excess of (a) the present value of the anticipated tax
liabilities over (b) the present value of the anticipated savings associated
with holding such Certificate, in each case calculated in accordance with U.S.
Treasury Regulations Sections 1.860E-1(c)(7) and (8), computing present values
using a discount rate equal to the short-term Federal rate prescribed by Section
1274(d) of the Code and the compounding period used by the Transferee.
OR
[_] The transfer of the Class R Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which
income from Class R Certificate will only be taxed in the United
States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer,
the Transferee had gross assets for financial reporting purposes
(excluding any obligation of a person related to the Transferee
within the meaning of U.S. Treasury Regulations Section
1.860E-1(c)(6)(ii)) in excess of $100 million and net assets in
excess of $10 million;
(iii) the Transferee will transfer the Class R Certificate
only to another "eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii) and
(iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to
it to acquire the Class R Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and reinvestment
assumptions, tax rates and other factors specific to the Transferee)
that it has determined in good faith; and
(v) in the event of any transfer of the Class R Certificate by
the Transferee, the Transferee will require its transferee to
complete a representation in the form of this Attachment A as a
condition of the transferee's purchase of the Class R Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Xxxxx Fargo Bank Minnesota, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - ABFC, Series 2002-OPT1
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: ABFC Asset-Backed Certificates, Series 2002-OPT1
Ladies and Gentlemen:
In connection with our disposition of the ABFC Asset-Backed
Certificates, Series 2002-OPT1 (the "Certificates"), we certify that (a) we
understand that the Certificates have not been registered under the Securities
Act of 1933, as amended (the "Act"), and are being disposed by us in a
transaction that is exempt from the registration requirements of the Act, (b) we
have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of the Class R Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of the Class R Certificate is to impede the assessment or collection
of tax.
Very truly yours,
[_____________________]
By:______________________________________
EXHIBIT M
MONTHLY INFORMATION DELIVERED BY MASTER SERVICER
1. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number and Principal Balances of all Mortgage
Loans which were the subject of Principal Prepayments during the related
Collection Period.
2. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of all curtailments which were received
during the related Collection Period.
3. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the principal portion of
all Monthly Payments received during the related Collection Period.
4. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the amount of interest received on the Mortgage
Loans during the related Collection Period.
5. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Advances made and
recovered with respect to such Distribution Date.
6. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the aggregate amount of the Servicing Advances
made and recovered with respect to such Distribution Date.
7. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the delinquency and foreclosure information and
the amount of Mortgage Loan Losses during the related Collection Period.
8. The information contained in the Liquidation Report for the related
Collection Period.
9. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the weighted average maturity, the weighted
average Mortgage Interest Rate and the weighted average Net Mortgage
Interest Rate as of the last day of the Collection Period preceding of the
related Accrual Period.
10. The Servicing Fees paid and Servicing Fees accrued during the related
Collection Period.
11. The Trustee Fees paid and Trustee Fees accrued during the related
Collection Period.
12. The Credit Risk Manager Fees paid and Credit Risk Manager Fees accrued
during the related Collection Period.
13. The amount of all payments or reimbursements to the Master Servicer paid
or to be paid since the prior Distribution Date (or in the case of the
first Distribution Date, since the Closing Date).
14. The Pool Balance, the aggregate Principal Balance of the Group 1 Mortgage
Loan and the aggregate Principal Balance of the Group 2 Mortgage Loans.
15. With respect to the Mortgage Pool, the Group 1 Mortgage Loans and the
Group 2 Mortgage Loans, the number of Mortgage Loans outstanding at the
beginning and at the end of the related Collection Period.
16. The aggregate interest accrued on the Mortgage Loans, the Group 1 Mortgage
Loans and the Group 2 Mortgage Loans, at their respective Mortgage
Interest Rates for the related Collection Period.
17. 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.
18. The aggregate Realized Losses in the Mortgage Pool, in the Group 1
Mortgage Loans and in the Group 2 Mortgage Loans since the Cut-off Date as
of the end of the related Collection Period.
19. The amount of Prepayment Charges received, the amount of Servicer
Prepayment Charge Payment Amounts paid, and the reason for any Prepayment
Charges waived without a corresponding Servicer Prepayment Charge Payment
Amount, all for the related Collection Period.
20. The amount of Yield Maintenance Agreement Payments received with respect
to such Distribution Date.
EXHIBIT N
FORM OF YIELD MAINTENANCE AGREEMENT
(INTENTIONALLY OMITTED)
EXHIBIT O
FORM OF AUCTION ADMINISTRATION AGREEMENT
(INTENTIONALLY OMITTED)
EXHIBIT P
FORM OF SWAP AGREEMENT
(INTENTIONALLY OMITTED)
EXHIBIT Q
FORM OF CERTIFICATION
CERTIFICATION TO BE PROVIDED WITH FORM 10-K
ABFC 2002-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2002-OPT1
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K, and all Monthly Form 8-K's
containing Distribution Date Statements filed in respect of periods
included in the year covered by this annual report, of the ABFC 2002-OPT1
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 servicing information required to be provided
to the Trustee by the Master Servicer under the Pooling and Servicing
Agreement, dated as of September 1, 2002 (the "Agreement"), among Asset
Backed Funding Corporation, as depositor, Option One Mortgage Corporation,
as master servicer (the "Master Servicer"), and Xxxxx Fargo Bank
Minnesota, National Association, as trustee (the "Trustee") is included in
these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Agreement and based upon the review required under the
Agreement, and except as disclosed in the report, the Master Servicer has
fulfilled its obligations under the Agreement; and
5. I have disclosed to the Trust's certified public accountants all
significant deficiencies relating to the Master Servicer's compliance with
the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Agreement.
[CERTIFYING ENTITY]
By:_____________________________________
Name:
Title:
EXHIBIT R-1
FORM OF CERTIFICATION TO BE PROVIDED BY THE TRUSTEE TO THE DEPOSITOR
ABFC 2002-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2002-OPT1
I, [identify the certifying individual], certify to Asset Backed
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year [___]
and all Monthly Form 8-K's containing Distribution Date Statements filed
in respect of periods included in the year covered by that annual report,
of the ABFC 2002-OPT1 Trust (the "Trust");
2. Based on my knowledge, the distribution information in the Distribution
Date Statements contained in all Monthly Form 8-K's included in the year
covered by the annual report on Form 10-K for the calendar year [___],
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by that annual report;
and
3. Based on my knowledge, the distribution information required to be
provided by the Trustee under the Pooling and Servicing Agreement, dated
as of September 1, 2002 (the "Agreement"), among Asset Backed Funding
Corporation, as depositor (the "Depositor"), Option One Mortgage
Corporation, as master servicer (the "Master Servicer"), and Xxxxx Fargo
Bank Minnesota, National Association, as trustee (the "Trustee") is
included in these reports.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT R-2
FORM OF CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER TO THE DEPOSITOR
ABFC 2002-OPT1 TRUST,
ASSET-BACKED CERTIFICATES, SERIES 2002-OPT1
I, [identify the certifying individual], certify to Asset Backed
Funding Corporation and Xxxxx Fargo Bank Minnesota, National Association, as
trustee and their officers, directors and affiliates, and with the knowledge and
intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the calendar year
[___], and all Monthly Form 8-K's containing Distribution Date Statements
filed in respect of periods included in the year covered by that annual
report, of the ABFC 2002-OPT1 Trust (the "Trust");
2. Based on my knowledge, the servicing information in the Distribution Date
Statements contained in all Monthly Form 8-K's included in the year
covered by the annual report on Form 10-K for the calendar year [___],
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not
misleading as of the last day of the period covered by that annual report;
3. Based on my knowledge, the servicing information required to be provided
to the Trustee by the Master Servicer under the Pooling and Servicing
Agreement, dated as of September 1, 2002 (the "Agreement"), among Asset
Backed Funding Corporation, as depositor (the "Depositor"), Option One
Mortgage Corporation, as master servicer (the "Master Servicer"), and
Xxxxx Fargo Bank Minnesota, National Association, as trustee (the
"Trustee") is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the Agreement and based upon the review required under the
Agreement, and except as disclosed in the report, the Master Servicer has
fulfilled its obligations under the Agreement; and
5. I have disclosed to the Trust's certified public accountants all
significant deficiencies relating to the Master Servicer's compliance with
the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Agreement.
OPTION ONE MORTGAGE CORPORATION
By:_____________________________________
Name:
Title:
Schedule I
(See Exhibits D-1 and D-2)